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Comparisons
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TOP Donor Advised Funds
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Private Foundations
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Legal and Accounting Fees
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No legal or accounting cost to establish or maintain. |
Non-profit corporation or trust organized as a private foundation. Attorney involved to establish and accountant needed for annual filing. |
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Size
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$10,000 or more
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Substantial assets to be worthwhile, often well over $3 million |
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Charitable deductions -
appreciated property
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Tax deduction available for full market value and no capital gains tax incurred by donor.
Deduction available up to 30% of adjusted gross income. Tax deduction may be taken for fair market value of marketable securities. Deductible up to 20% of adjusted gross income. |
Tax deduction for other property is limited to the lower of cost or fair market value and is limited to 20% of adjusted gross income. |
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Charitable
deductions – cash
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Tax deduction of up to 50% of adjusted gross income |
Tax deduction is limited to 30% of adjusted gross income |
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Donor Control
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Donor has some choice in investment and makes grant recommendations subject to foundation oversight that primarily abides by donor recommendations. |
Donor retains complete control over investments and grant-making,
subject to IRS requirements. |
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Pay-Out Requirements
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Do not apply.
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Must pay out for charitable purposes at least 5% of its asset value
regardless of its annual income. |
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Administration Concerns
(personnel, facility, gift and grant management)
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All administration, grant
stewardship and guidance provided. |
Must establish and/or obtain these services. |
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Annual Taxes
and Costs
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A 1% management fee. No tax reporting needed. |
Generally exempt from income tax but is subject to excise tax of up to 2% of net investment gain including net capital gains. Taxes must be filed annually, including
supporting schedules. |
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Investments and Liability
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Professionally invested through foundation. |
Must research and secure own investments. |
