Comparison chart: Advantages of community vs. private vs. commercial fund

Donor-Advised Fund at the NCCF

Commercial Institution Gift  Funds

Private Foundation

Recommended size

$10,000 minimum

Varies

$10 million recommended minimum to justify operating costs

Start-up and initial costs

None

None

All legal, accounting and filing fees

Ongoing administration and annual costs

1.5% annual fee (may be negotiated favorably for funds above $1 million)

Fees vary

All costs (legal, accounting, payroll, audit) are incurred by private foundation

Excise taxes

None

Subject to 1-2% annually

Tax status and filings

Qualifies under NCCF’s public charity status; no filing necessary

Covered under nonprofit status of charitable subsidiary charity status.

Must file for private foundation tax-exempt status

Tax-deductibility of gifts

Cash

Appreciated stock (held more than one year)

Real estate and closely held stock (held more than one year)

Deduction up to 50% of adjusted gross income

Fair market value up to 30% of adjusted gross income

Fair market value up to 30% of adjusted gross income

Deduction up to 50% of adjusted gross income.

Fair market value up to 30% of adjusted gross income

Fair market value up to 30% of adjusted gross income

Deduction limited to 30% of adjusted gross income

Fair market value up to 20% of adjusted gross income

Cost basis up to 20% of adjusted gross income.

Grantmaking support

NCCF provides due diligence review of grantees recommended by donor.

Research on specific non-profits provided upon request.

Most have no professional experience and offer minimum due diligence on grant recipients.

Donor must establish and oversee all evaluation, monitoring and reporting procedures.

Subject to screening, evaluation and approval by board of trustees

Payout requirements

None.  Grant recommendations of 5% recommended but no government-required payout

Varies, many require annual minimum payout of 5%

Annual minimum payout of 5% of assets required

Investments

Fund assets professionally invested through NCCF.  Donor may choose from selection of NCCF asset managers.

No donor control of investments

Investment fees netted from yield (average.65%)

Fund offers approved investment choices.

Fees vary and range from .3 – 2.0%

Must secure and oversee own investments. 

Investment management fees the responsibility of the private foundation

Donor involvement

Donor recommends grants to qualified non-profits.  Grants are approved by NCCF.

Donor recommends grants to qualified nonprofits.  Grants are approved by trustees of the gift fund.

Donor appoints initial board of a non-profit corporation.  Board controls investment and grantmaking.

If organized as a trust, donor designates trustee to control these functions.

Privacy and confidentiality

Fund may be named or anonymous.  Contribution information may be kept confidential.

Detailed public disclosure annually from posting of IRS 990PF on Internet.