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Community Foundation vs. Private Foundation

Community foundations offer donors benefits not available through private foundations. Below is a comparison between and Donor Advised Fund and a Private Foundation.

Donor Advised Funds Private Foundations
Start Up Time Immediate Several weeks or months
Start Up Costs Typically none Legal (and other) fees are substantial
Administrative Fees .85% - 2.50% Varies with choice of board, and level of services required; Must file annual tax returns, conduct independent audit, manage and administer all functions (typically 2.5%-4% per year)
Tax Deduction Limits (Gifts of cash) 50% of adjusted gross income 30% of adjusted gross income
Tax Deduction Limits (Stock or Real Property) 30% of adjusted gross income 20% of adjusted gross income
Valuation of Gifts Fair market value Fair market value for cash and publicly traded stock, cost basis for gifts of closely held stock or real property
Excise Tax None 1% - 2% of net investment income annually
Required Grant Distributions None required Must expend 5% of net assets value annually, regardless of how much the assets earn
Privacy Names of individual donors can be kept confidential Must file public tax returns on grants, investment fees, trustee names, staff salaries, etc.
Control Donor may recommend grants Donor family has complete control of all grant making and investment decisions, subject to self-dealing rules

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