Helping your clients determine how to best implement their personal legacy needs to weigh issues of responsibility, control, flexibility, and cost. Invite us to join in your conversations with your clients. . . we’ll bring value and unique options to the table.
| Elements | Donor Advised Funds at CFLNFC | Private Foundation |
|---|---|---|
| START UP CONSIDERATIONS | ||
| Cost | None | Incorporation fees, legal fees, accounting fees |
| Timeframe | Paperwork approved within days | Generally months to more than a year for final IRS approval |
| Financial Limitations | Considered endowed $10,000 ($25,000 for Scholarship Funds) | Most experts recommend at least $5 million |
| TAX DEDUCTIBILITY | ||
| Cash Gifts | Up to 60% of Adjusted Gross Income | Up to 30% of Adjusted Gross Income |
| Publicly Traded Securities | Fair Market Value up to 30% of Adjusted Gross Income | Fair Market Value up to 20% of Adjusted Gross Income |
| Real Estate and Closely Held Stock | Fair Market Value of up to 30% of Adjusted Gross Income | Fair Market Value up to 20% of Adjusted Gross Income |
| DISTRIBUTION AND PAYOUT REQUIREMENTS | ||
| Corpus or Fund Assets | No payout requirements. Donor can distribute far more than 5% if wished! | Required annual payout of at least 5% of assets |
| INCOME AND REPORTING CONSIDERATIONS | ||
| Tax Status | Fund becomes a “component” fund of CFLNFC, a 501(c)(3) public charity | A 501(c)(3) Private charity |
| Excise Tax on Investment Income | none | Up to 1.39% various taxes on net investment income |
| Tax Filings and Financial Audit | All inclusive under CFLNF | Must prepare and file Form 990PF, State Filings |
| PUBLICITY | ||
| Donor | Can receive optimal publicity OR choose total anonymity | Donors are publicly cited on Private Foundation Tax Return published online |
| ADMINSTRATION | ||
| Staffing | CFLNC staff is YOUR personalized staff and grant making expert | Must hire, oversee, administer, etc. |
| Grants Due Diligence | Grants laws and regulations closely monitored and adhered to. Staff help to identify, investigate, assess grantees | Must stay in step and aware of current laws, perform due diligence |
| Investment Management | Benefits from our oversight and knowledgeable investment policy for endowment and grant making | Responsibility of trustees |
| DONOR INVOLVEMENT | ||
| Documentation | Fund Agreement provides flexible approaches, including donor involvement in grant recommendations | Must maintain bylaws and policies |
| Timespan | Flexible and forever | Most private family foundations seek professional oversight after three generations as family shift, move, loose interest |
| Summary | Flexibility, greater tax advantages, low administrative costs, efficient & knowledgeable grant making, increased privacy, credible investment practices, legal policies in place | Autonomous Control |