Home > Gift Legacy Blog > Thinking about a Private Foundation?

Consider a fund at the Community Foundation instead.

At the Community Foundation, we have the privilege of working with many people who had initially planned to establish a private charitable foundation, but then found that setting up a charitable fund with the Community Foundation was a better option for them. It is truly a better choice for almost everyone… let me explain.

The advantages of having a charitable fund rather than a private foundation include:
• When you have a fund, you have a staff. We do the work for you. You just do what you want to do.
• There are no professional fees, legal, accounting, or otherwise.
• There are no “start-up” costs. Zero! And, we can set up your fund in hours, not days.
• You get greater deductibility for your gifts since we are a public charity.
• We keep extensive records, paper and digital, and can retrieve them quickly.
• You have online access to your fund for financial, grantmaking, and nonprofit research.
• Your fund records are private, giving you anonymity. Private foundation records are available to anyone.
• There are no taxes. Private foundation’s pay a 2% tax on investment income.
• Private foundations have self-dealing limitations and a mandatory five percent payout. A fund at the Community Foundation can avoid these issues.
• We can protect your charitable legacy. If you wish, we’ll tell your story, share photos, your values, your reasons for giving. We have staff who specialize in this area.
• You recommend grants; we implement your requests. It is a fallacy that you lose power and oversight when you work with the Community Foundation rather than setting up a private foundation.
• Our philanthropy services team has experience working with and educating younger generations of family members.
• Imagine the possibilities! You name it, you wish it, we can help you with it. Every new or unusual request is an opportunity for us to expand our professional offerings.

The Community Foundation can not only carry out your charitable plans but can also serve as an intermediary on projects you would like to support. We have in-depth knowledge about issues and causes in our region, but also about giving nationally, and even globally. We have efficiencies and economies of scale not seen in private foundations, and we are experts at compliance and risk management. We’re always here to back you up and won’t bill you for our time.

Some of the most generous families in our region are conducting their charitable giving through the Community Foundation rather than establishing their own foundations. Their support has given prestige to our work, and we are greatly honored. If desired, we create a fund letterhead. Their fund can certainly be called a Foundation if they wish, and they can be the contact for the Foundation as well.

The two noted advantages to a private foundation are: a private foundation allows you to pay the next generation, your kids, and grandkids, as employees, and you may directly manage the investments. We have found that most donors are not very interested in either of those attributes. Sometimes “control” is mentioned as a reason for private foundations, but if that is the case, I encourage talking to any one of the hundreds of people who have a fund at the Community Foundation. I think the answer(s) will eliminate that concern.

If you’d like to learn more about establishing a charitable fund, now or through your estate, please give us a call at 775-333-5499.
Chris Askin, President, and CEO
Connecting people who care with causes that matter

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