Comparison of Donor Advised Funds and Private Foundations

Consider the advantages of working through the North Carolina Community Foundation to accomplish your charitable goals

Establishment and operation

Donor-Advised Fund at the NCCFPrivate Foundation
Recommended Size
$25,000 minimum, as of July 1
$10 million recommended minimum to justify operating costs
Start-up and initial costsNone

All legal, accounting and filing fees
Ongoing administration and annual costs1% annual fee (may be negotiated favorably for funds above $1 million)

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

Tax considerations

Excise taxesNoneSubject to 1-2% annually
Tax status and filingsQualifies under NCCF’s public charity status; no filing necessaryMust file for private foundation tax-exempt status
Excise taxesNoneSubject to 1-2% annually
Tax-deducibility of gifts

Cash

Appreciated stock (held more than one year)

Real estate and closely held stock (held more than one year)
Deduction of up to 60% 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.
Donor must establish and oversee all evaluation, monitoring and reporting procedures.
Payout requirementsNone. Grant recommendations of 5% recommended but no government-required payoutAnnual minimum payout of 5% of assets required (subject to penalty on undistributed amount)

Investment management

InvestmentsFund assets professionally invested through NCCF. Donor may choose from selection of NCCF asset managers.Must secure and oversee own investments. 

Investment management fees the responsibility of the private foundation

Donor involvement and privacy

Donor involvementDonor recommends grants to qualified nonprofits. Grants are approved by NCCF.Donor appoints initial board of a nonprofit corporation.  Board controls investment and grantmaking.
Privacy and confidentialityFund may be named or anonymous.  Contributions, assets and grants may be kept confidential.Detailed public disclosure annually from posting of IRS 990PF, which makes public all assets and grants.

To discuss the advantages of a community foundation structure vs. a private foundation, please contact our development team.