Converting a Private Foundation and Services

Symbiotic Ways Foundations Connect with Community Foundations

The breadth and scope of the Community Foundation for Loudoun and Northern Fauquier Counties offers existing private and family foundations with partnership options as well as serve as an alternative to forming a private foundation.

When considering forming a foundation, or terminating a foundation to form a grantmaking fund within the Community Foundation, we suggest examining this helpful chart to compare the advantages and disadvantages between a donor advised fund and private foundation.  With our expertise and application of best practices in philanthropy, the Community Foundation for Loudoun and Northern Fauquier Counties is a smart choice to substantially reduce administrative burdens and costs, provide anonymity, and benefit from turnkey operation and processing for due diligence.

Terminating a Private Foundation

Terminating a private foundation and transferring its balance into a fund at the Community Foundation does require specific processes. Care must be taken to avoid the assessment of termination tax.  We work with you and your tax accountant to ensure best practices.  IRS Code Section 507(b) provides that there is no termination tax assessed against the organization upon termination if it distributes all of its net assets to one or more organizations described in Code Section 170(b)(1)(A), each of which has been in existence and so described for a continuous period of at least 60 calendar months immediately preceding such distribution.  The Community Foundation meets these requirements.

It is also important that the private foundation adhere to its own governing documents and applicable state law as it considers termination.  Your professional advisors should be consulted.

Other Services

The Community Foundation for Loudoun and Northern Fauquier Counties  also is available to aid and support a private foundation with such administrative services as:

  • assisting with the establishment of grantmaking programs,
  • grants review, site visits, and due diligence,
  • researching grant areas of interest and high impact,
  • identifying opportunities for collaborating with the other funders.

It is often far more economical to outsource this function to us rather than hiring someone else to do the “stuff.”  Costs vary based on volume.

While the Community Foundation must undertake greater filing requirements with the Internal Revenue Service to offer these services, we welcome such conversations.

  • Designing and maintaining systems to monitor funded programs,
  • Handling day-to-day inquiries from potential grant applicants
  • Cutting checks for approved grants and expenses and balancing the checking account
  • Organizing board and committee meetings
  • Tracking all grant applications, grants awarded, and generating related reports.