Giving Vehicle Comparison
The chart below reveals key differences between a donor-advised fund and a private foundation. Click here to see a comparison that includes supporting organizations.
Donor-Advised Funds | Private Foundations | |
Start-Up Time: | Immediate | Can take several weeks or months |
Start-Up Costs: | None | Legal (and other) fees are typically substantial |
Ongoing Administrative and Management Fees: | 85 basis points (0.85%) or less, plus investment management fees | Can be in the range of 250-400 basis points (2.5% to 4% per year) |
Tax deduction limits for gifts of cash: | 50% of adjusted gross income | 30% of adjusted gross income |
Tax deduction limits for gifts of stock or real property: | 30% of adjusted gross income | 20% of adjusted gross income |
Valuation of gifts: | Fair market value | Fair market value for publicly-traded stock, cost basis for all other gifts, including gifts of closely-held stock or real property |
Required Grant Distribution: | None | Must expend 5% of net asset value annually, regardless of how much the assets earn |
Excise Taxes: | None | 1% to 2% of net investment income annually |
Privacy: | Names of individual donors can be kept confidential if desired, and grants can be made anonymously. | Must file detailed and public tax returns on grants, investment fees, trustee names, staff salaries, etc. |
Administrative Responsibilities: | Recommend grants to favorite charitable causes | Manage assets, keep records, select charities, administer grants, file state and federal tax returns, maintain board minutes, etc. |