This chart summarizes key differences between establishing a fund at the Community Foundation , giving a gift directly to a charity and forming a private foundation.
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Community Foundation Fund
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Direct Gift to Charity
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Private
Foundation
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Donor can control investment of assets
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no
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no
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yes
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Donor can control giving priorities
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Limited (2)
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yes (1)
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yes
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How likely to be perpetual
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high
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low (3)
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high
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By virtue of gift, donor may control who serves on governing board
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no (4)
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no (4)
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yes
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Requires donor time and effort, plus expense of staff and management
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no (5)
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no
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yes
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Minimum payout required
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no
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no
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yes
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Must pay 1-2% tax on investment income and realized capital gains
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no
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no
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yes
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Tax deduction for gifts of cash (% of adjusted gross income that may be deducted)
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50% (6)
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50%
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30% (6)
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Tax deduction for gifts of stock or real property (% of adjusted gross income that may be deducted)
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30% (6)
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30% (6)
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20% (6) (7)
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Valuation of gifts of property other than publicly traded stock
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Fair market value
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Cost basis
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Separate tax return required and open to public inspection
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no
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no
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yes
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- Charity and donor can agree on how contribution is spent.
- A restricted gift can be confined to the stated purpose, but the donor relinquishes control of the investments and its disposition. A donor advised fund permits the donor to make recommendations subject to the ultimate control of the community foundation.
- Except when you create an endowment
- Any citizen may be elected or appointed to the board of any public charity. The donor gift does not guarantee such an outcome except in the case of supporting organizations.
- Community foundations offer assess a management or administrative fee.
- Excess in any year's donations can be carried forward for five years.
- Except for gifts of publicly traded stock, the deductible value of lifetime gifts of closely held stock or real property is limited to tax basis, which is generally cost.