It is a charitable fund that can be established by individuals and families to direct charitable contributions to nonprofit organizations from a single funding source. With every deposit into the fund, the donor receives a tax benefit in the same year. However, donations from the fund, in the form of grants, can be made to nonprofits over time.
“Donor-advised funds are a great option for people who want involvement with charitable giving, yet seek convenience and expert oversight.”
After opening your fund with an initial contribution (such as cash, securities and closely-held stock), you can advise Community First Foundation on the charitable organizations you’d like to receive grants from the fund. If you don’t have specific nonprofits in mind, you are welcome to discuss your interests with us and we will share our knowledge of local charities.
Name your fund and Community First Foundation will provide administration and oversight, such as verifying charities’ 501(c)(3) status, processing grants, maintaining records, and providing you with simple receipts and statements for tax purposes.
Donor-advised funds offer a flexible, inexpensive opportunity to make your giving more organized and impactful. By completing an agreement and making an initial contribution, you can set up a fund at a community foundation such as Community First Foundation. The fund becomes a part of the Foundation, which provides administrative, investment, grantmaking and recordkeeping support. With no annual distribution requirement and a $5,000 minimum, you receive an immediate tax deduction, and the maximum tax benefits allowed by law.
Private foundations are nonprofit corporations or trusts requiring complex Federal and State filings and substantial legal support to establish. The typical size of a private foundation is $1,000,000 or more. The foundation manages and controls the assets and is responsible for the administration, recordkeeping, and grantmaking. The foundation is required to distribute at least 5 percent of its asset value annually and tax benefits are lower than those of a donor-advised fund. Detailed and public tax returns must be filed.
In fact, increasingly private foundations use donor-advised funds to add flexibility to the timing of grants and enable individual family members to have more grantmaking control.
To learn more about the advantages of a donor-advised fund
or how your private foundation can benefit from a fund, contact:
Lynda Ricketson, CFRE
Vice President of Philanthropic Services
Community First Foundation’s minimum is $5,000. Donor-Advised Fund Minimums and Fees >