| Donor-Advised Fund | Private Foundation | |
|---|---|---|
| Ease of Creation | Execution of a simple Deed of Gift: "one day/one document." No set-up fees. | Creation of a new organization, application for exempt status and expenditure of time and money. Lengthy IRS approval process. |
| Tax Benefits^ | Taxpayer can deduct up to 60% of adjusted gross income for cash gifts. Full value of gifts of appreciated property is deductible up to 30% of adjusted gross income. | Cash gift deduction is limited to 30% of adjusted gross income. Deduction is limited to 20% of adjusted gross income. |
| Closely-Held Stock, LP & LLC Interests, Real Estate | Valued for charitable deduction at market value. | Value limited to cost basis. |
| Accounting and Tax Preparation | No separate tax return to file, and no tax to pay. Annual audit and 990 done by the DuPage Foundation. | Detailed reporting required and a 1.39% federal excise tax must be paid on net investment income, including gain on assets gifted to the foundation. Separate accounting statements required. |
| Grant Administration | Staff expertise in identifying potential recipients, reviewing proposals and evaluating performance. | Trustees must perform, contract or hire for these services. |
| Investments | No federal investment requirements; no equity concentration restrictions; opportunity to participate in investment pools. | Certain types of investments prohibited, and the foundation may not own more than a 20% equity interest in a business. |
| Distributions | No minimum payout required. | Approximately 5% of net investment values must be paid out for charitable purposes annually. Prohibition against grants to support lobbying. Restriction on scholarship and research grants. |
| Confidentiality | Names of donors need be revealed only to the IRS. | Asset balances, names/addresses of directors and contributors, grants, investments, fees and salaries must be made public through the 990-PF*. |
| Administration | The DuPage Foundation handles phone, mail, and bookkeeping. | Trustees must perform these tasks or hire someone to do so. |
| Size | $25,000 minimum, can be donated in multiple installments upon approval of a funding plan. | Substantial assets required. |
^Consult your tax advisor concerning alternative minimum tax implications and the five-year carry-over rule.
*Private foundations have little confidentiality and no anonymity. Anyone can access www.guidestar.org to gain information on any private foundation because all of the information is scanned from a foundation's 990-PF.
