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Creating a Fund Fund Vs. Private Foundation
Creating a Fund Fund Vs. Private Foundation
| Fund vs. Foundation Benefits Comparison |
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Private Foundation
X Takes months to establish
X Expensive to establish, plus ongoing accounting and recordkeeping costs
X Typically established with substantial assets X Annual tax return must be prepared and filed X Annual audit must be performed X Requires 5% of assets to be paid out annually X 1%-2% annual excise tax on net investment income X Income Tax Deductions X Up to 30% adjusted gross income for cash
X Fair market value up to 20% of adjusted gross income for publicly traded securities X Cost basis up to 20% of adjusted gross income for appreciated property X Costly ongoing administration and management fees
= Foundation name chosen by donor = Donor can involve family and heirs in grantmaking X Requires public disclosure X Penalty taxes may be imposed for excess business holdings or self dealing X May need to obtain expert advice for effective grantmaking = Can be established during lifetime or through trust or estate Fund in the LICF
√ Fund can be established in less than a day
√ Inexpensive to establish and administer √ Appropriate for any size assets √ No annual tax return √ No annual audit √ No annual payout requirements √ No excise tax √ Income Tax Deductions √ Up to 50% of adjusted gross income for cash
√ Fair market value up to 30% of adjusted gross income for publicly traded securities √ Fair market value up to 30% of adjusted gross income for appreciated property √ Low annual administration and management fees
= Fund name chosen by donor = Donor can involve family and heirs in grantmaking √ Anonymity can be maintained, if desired √ No penalty taxes √ Professional staff available for grantmaking consultation = Can be established during lifetime or through trust or estate |
