Donor-Advised Funds vs. Private Foundations

A donor-advised fund is a smart way to achieve your philanthropic goals.

Private foundations that transfer assets here to create a donor-advised fund enjoy immediate excise tax relief, as well as freedom from reporting requirements, a high level of grantmaking flexibility, lower administrative costs and excellent investment performance.

This means more of your foundation’s assets can be used for charitable purposes.

For some donors, having both a private foundation and a donor-advised fund enhances your charitable giving.

When should I consider starting a donor-advised fund?

You might consider starting a donor-advised fund if you:

  • No longer have the time or expertise to handle the administrative and regulatory responsibilities of your private foundation.
  • Want to give anonymously.
  • Need more favorable deductibility for your charitable contributions.
  • Find your foundation is costing too much.
  • You have no successor to continue your philanthropy.
  • You need flexibility in managing the 5% annual granting requirement.
  • You want to learn about local organizations doing a good job in your charitable area of interest.
  • You have complex assets you want to donate.

Compare private foundations to a donor-advised fund

There are some significant pros and cons when you compare private foundations to donor-advised funds [PDF 157 KB].

Dissolving a private foundation

 We can help you manage the complicated process of dissolving your private foundation.

Managing your private foundation's succession

Transferring your private foundation to a fund at the Community Foundation is the first step in ensuring that directed grantmaking will continue the name of the private foundation for generations to come.