Alternatives to Private Foundations
Donor Advised Fund
A Donor Advised Fund is a great alternative to establishing a private foundation. The fund allows you to make a gift and work with our professional staff to suggest ongoing uses for the fund, targeting the issues you care about most. Grant awards are issued to charities in the name of the fund (or anonymously if you prefer). It’s a simple, powerful, and highly personal approach to giving.
These funds are convenient, flexible tools for individuals, families, businesses, or groups that want to be personally involved in suggesting grants. If you have a range of community interests, you may find that it’s an ideal vehicle for fulfilling your charitable goals.
If you currently have one, or are considering establishing a private foundation of your own, Donor advised funds can be an private foundation alternative that is typically less costly and easier to administer than other forms of philanthropic giving (such as family or corporate foundations). Your gift can also be combined with others to increase its impact, and you can add to the fund you establish at any time, receiving tax benefits with each new gift. And if you choose to endow your gift, it becomes a permanent community funding resource.
Another excellent alternative to a private foundation, with only a fraction of the administrative responsibilities. You maintain personal involvement and support the causes you care about most while enjoying the favorable tax treatment of a public charity. We take care of investment management, startup costs, grant administration, and reporting.
Though connected to The Community Foundation, the supporting organization you establish is a separate charitable entity that bears whatever name you choose. You can have a great deal of control over your grantmaking without the burdens of operating a separate private foundation. You and future generations may even appoint successor board members to help direct the supporting organization you establish and define its purpose and mission.
Your contributions may yield a greater tax deduction than those made to a private foundation, and the supporting organization is not subject to other private foundation rules and regulations, such as paying an excise tax or making a minimum payout each year. You also have the choice of receiving recognition or remaining anonymous in your giving.
Several efficiencies preserve your charitable assets and allow you to make the impact you desire. The startup and administration is simple and allows your board to begin issuing grants right away. Through the years, we provide local grantmaking expertise, reporting services, and management of the supporting organization’s assets by investment professionals.
Considering establishing your own private foundation? Contact us first to consider all of your options.