Kristen Mihaljevic, CGPP, CAP®
Director of Development
919-256-6930
Private Foundation Alternatives
Donor advised funds are a smart, attractive alternative to a private foundation.
When people want to make a difference in their community, incorporate family into philanthropy, and build a legacy, they consider starting a private foundation. While private foundations may be appropriate for some families, the administrative requirements and operating costs can be substantial.
A donor advised fund at the North Carolina Community Foundation is a flexible, convenient, cost-effective option for your clients considering a private foundation.
And, with our Charitable Investment Partners Program, your client may continue engaging you as investment manager on their NCCF fund while taking advantage of the Foundation’s philanthropic expertise and relationship-based services.
Comparison of key features of a private foundation with a donor advised fund
Donor advised fund
- Deduct up to 60% of AGI for cash gifts
- Deduct up to 30% of AGI for gifts of long-term appreciated securities, real estate, closely-held stock
Private foundation
- Deduct 30% of AGI for cash gifts
- Deduct 20% of AGI for gifts of long-term appreciated securities; deduction limited to cost basis for gifts of real estate and closely-held stock
Donor advised fund
- Quick and easy to establish; can be done in a matter of days
- Fund assets professionally managed through NCCF or by your financial advisor through our Charitable Investment Partners Program
Private foundation
- Quick and easy to establish; can be done in a matter of days
- Fund assets professionally managed through NCCF or by your financial advisor through our Charitable Investment Partners Program
Donor advised fund
- A DAF endowment may be started with a minimum gift of $25,000.
- 1% annual administrative fee (stepped down for funds over $1 million)
- The NCCF Support Fee helps advance the charitable mission of NCCF, is reinvested into the community, and enables NCCF to provide you with robust donor services
Private foundation
- $10 million minimum recommended to justify operating costs
- Annual excise taxes of 1-2%
- All costs, such as legal, accounting, payroll, or audit, are incurred by the private foundation
Donor advised fund
- No requirements for annual granting; 5% recommended
- A dedicated NCCF team member will offer you personalized philanthropic guidance, as well as local and statewide knowledge and expertise
- NCCF provides due diligence review of grantees
- Anonymity available
Private foundation
- Annual minimum payout of 5% required, penalty on undistributed amount
- Donor must establish and oversee all evaluation, monitoring, and reporting
Does your client have a private foundation but want to engage with NCCF?
Convert private foundation to a donor advised fund. If your client wants to simplify their involvement in the administration and maintenance of their private foundation but wishes to preserve the foundation’s legacy, consider converting it to a donor advised fund at NCCF. The name of the client’s private foundation may be preserved (although anonymity is also an option) and grantmaking may continue in accordance with their foundation’s original giving intent.
Keep private foundation and establish a parallel DAF at NCCF. Your clients with a private foundation may find value in establishing a parallel donor-advised fund to access the comprehensive services at NCCF, for anonymous grantmaking, or as a vessel to accept part or all of the private foundation’s required annual distribution to allow additional time for grant decisions.
Contact a member of our team today
