Comparison chart: Advantages of community vs. private vs. commercial fund
Consider the advantages of working through the North Carolina Community Foundation to accomplish your charitable goals
Establishment and Operation
|
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 |
Tax Considerations
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 and Requirements
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 |
Investment Management
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 and Privacy
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. |
If you want to discuss the advantages of a community foundation structure vs. a private foundation, contact Beth Boney Jenkins, Vice President of Development, at 919-256-6932 or email her.