|
Donor-Advised Fund |
Outright Gift |
Supporting
Organization
(Type 1) |
Private
Foundation |
Donor Control
of Grantmaking
and Investments |
Donor is involved in recommending grants to qualified nonprofit groups and in some cases can recommend investment manager. |
Donor gift must specify use, and usually has no
control over investments. |
Supporting Organization board
has complete control over investments
and grantmaking. CFNWCT and donor work together to
select board. |
Donor appoints board, which controls investments and grantmaking. |
| Tax-Exempt Status |
Covered under CFNWCT’s public charity status. |
Covered under charity’s nonprofit status. |
Entitled to public charity status based on its relationship with CFNWCT. |
Applies to IRS for private foundation tax-exempt status. |
| Income Tax Deductions for Gifts of: |
| Cash |
Up to 50% of adjusted gross income. |
Up to 50% of adjusted gross income. |
Up to 50% of adjusted gross income. |
Up to 30% of adjusted gross income. |
| Publicly Traded Securities |
Fair market value up to 30% of adjusted gross income. |
Fair market value up to 30% of adjusted gross income. |
Fair market value up to 30% of adjusted gross income. |
Fair market value up to 20% of adjusted gross income. |
| Real Estate, Closely Held Securities, and Other Special Categories |
Fair market value up to 30% of adjusted gross income. |
Fair market value up to 30% of adjusted gross income. Usually, real estate and closely held securities are not accepted. |
Fair market value up to 30% of adjusted gross income. |
Deductible at cost basis up to 20% of adjusted gross income. |
| Support |
| Grantmaking Advice and Follow-up |
Professional staff is available to help identify and assess grantees, provide input on community needs, and ensure recipients are qualified and effective. Educational programs available. |
Usually not required. |
Professional staff is available to help identify and assess grantees, provide input on community needs, and ensure recipients are qualified and effective. Educational programs available. |
Private Foundation must arrange and support its own grantmaking and monitoring activities. |
| Restrictions |
| Distributions to Individuals |
Not allowed, except in specific instances (e.g., qualified scholarships). |
Depends on the charity. |
Not allowed, except in specific instances (e.g., qualified scholarships). |
Not allowed. |
| International Grants |
Allowed. Expenditure Responsibility rests on CFNWCT. |
Allowed. Expenditure Responsibility rests on Donor. |
Allowed. Expenditure Responsibility rests on CFNWCT. |
Allowed. Expenditure Responsibility rests on Donor. |
| Distribution Requirements |
None. |
Not applicable. |
None. |
At least 5% of net asset value annually. Penalty tax is 30% of undistributed amount. |
| Start-Up Considerations |
| Costs |
None. |
None. |
CFNWCT covers most costs. |
Several thousand $ for legal and accounting expenses and filing fees. |
| Time-Frame |
Immediate. |
Immediate. |
Several months. |
Several months. |
| Minimum Contribution |
Initial Contribution $5,000.
$10,000 for Scholarship Fund.
|
None. |
$5 million recommended. |
None, but smaller private foundations may not be cost-effective. |
| Annual Administrative Requirements |
| Taxes |
None. |
None. |
None. |
Excise tax of up to 2% of net investment income, including net capital gains. |
| Reporting |
None. |
None. |
Annual tax returns and audits prepared and filed by CFNWCT. |
Annual tax return, including detailed financial schedules. |
| Privacy |
Donors may remain anonymous. |
Donors may remain anonymous. |
Donors may remain anonymous, but IRS Form 990 lists officers, directors, and trustees. |
Donors may remain anonymous, but IRS Form 990-PF lists officers, directors, and trustees. |
