Private Foundations vs. a Fund at Shenandoah Community Foundation
Some of your clients may be considering the establishment of a private family foundation. The Shenandoah Community Foundation can be a vehicle for the same philanthropic goals with much less administrative burden and thousands of dollars less in expense, both in the set-up and ongoing. Please see the comparison chart below.
Convert an Existing Private Foundation
Families with private foundations may already be chafing under the administrative or cost burden and be seeking alternatives. It is simple to terminate a private foundation and establish a fund with the same name and goals with the Shenandoah Community Foundation. Click below to download a copy of “Considerations in Terminating a Virginia Private Foundation” for more information.
Considerations-in-terminating-a-virginia-private-foundation in Word
Considerations-in-terminating-a-virginia-private-foundation in PDF
Comparison of Private Foundations vs. Donor-Advised Funds at the Shenandoah Community Foundation
| Shenandoah Community Foundation Donor – Advised Fund | Private Foundation | |
| Donor Involvement | Donor recommends grants to qualified nonprofit groups. Grants are approved by the Shenandoah Community Foundation board of directors. | Donor appoints board, which controls investments and grantmaking. |
| Tax Status | Public charity. | Private charity. |
| Income Tax Deductions for Gifts of: | ||
|
Cash
|
Up to 60% of adjusted gross income. | Up to 30% of adjusted gross income. |
|
Appreciated Stock
|
Fair market value up to 30% of adjusted gross income. | Fair market value up to 20% of adjusted gross income. |
|
Real estate and closely held stock
|
Fair market value up to 30% of adjusted gross income. | Cost basis up to 20% of adjusted gross income. |
| Grantmaking Support | Foundation staff and board are available to help identify and assess grantees, provide input on community needs, and verify nonprofit status of groups. | Donors must arrange and support their own grantmaking and monitoring structure. |
| Start-up Costs | ||
|
Initial Costs
|
None. | Several thousands of dollars for legal and accounting expenses and filing fees. |
|
Minimum Contribution
|
$5,000 | Typically thousands to millions of dollars. |
| Administration | ||
|
Ongoing costs
|
Pooled administration; annual fee (currently 1%). | Several thousand dollars for legal and accounting expenses and filing fees. |
|
Reporting
|
Shenandoah Community Foundation handles reporting to IRS. | Annual 990 tax form must be filed. |