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Foundation of Broward
Privacy and Security Policies
 

Fund or Private Foundation?


They are not mutually exclusive.  Many people who create private foundations also create Funds with the Community Foundation of Broward.  

This compliments their foundation by:
  • Giving them access to expert staff and local knowledge
  • Enabling them to have impact on an issue their private foundation is not addressing
It supports their foundation by:
  • Meeting the 5% annual distribution requirement.  This can be especially helpful when investment returns are low.  
  • Preserving their giving power and allowing time to research and invest in solutions.
A Fund can also be an alternative to a private foundation by
  • Saving the time and expense of setting up a foundation
  • Earning greater tax advantages

Comparison Chart

 

Donor Advised Fund
at the Community Foundation of Broward



Private Foundation
Grantmaking & Investments
Flexible Grantmaking You recommend grants to qualified nonprofit groups. You appoint a board to control grantmaking.
Grant Research & Due Diligence Our grants department conducts due diligence for your grants; we also know the local needs and nonprofit organizations meeting those needs and we provide you educational programs and site visits. You must conduct due diligence, research charities and assess need, or hire a program director to handle. 
Grants to Individuals Grants to individuals are generally not allowed.  Scholarships to individuals are allowed – with appropriate language in your documents and required oversight to prevent “self-dealing”. 
Investment Management You can place your Fund in a highly diversified pool managed by an independent committee. You appoint a board or hire staff to control investments.
Tax Information
Tax Status IRS 501(c)(3) tax exempt public foundation. You apply to the IRS for private foundation tax exempt status.
Income Tax Deductions for Gifts of Cash Up to 50% of adjusted gross income. Up to 30% of adjusted gross income.
Income Tax Deductions for Gifts of Publicly Traded Securities Fair market value up to 30% of adjusted gross income. Fair market value up to 20% of adjusted gross income.
Income Tax Deductions for Gifts of Real Estate & Closely Held Securities Fair market value up to 30% of adjusted gross income. Deductible at cost basis up to 20% of adjusted gross income.
Distribution Requirements None. At least 5% of net asset value annually. Grants from your private foundation can be used to establish a Fund at the Community Foundation of Broward and meet the 5% requirement. 
Start Up Considerations
Costs None. Several thousand dollars for legal and accounting expenses and filing fees.
Time-Frame Immediate. Three - six months.
Minimum Contribution $25,000 None.
Annual Administrative Requirements
 Fees 1.5% of assets
<$2M

1.25% of assets
>$2M<$5M

1% of assets
>$5M<$10M

0.75% of assets
>$10M
Grantmaking, administrative, staff investment and overhead management financed independently.
Taxes None. Excise tax of up to 2% of net investment income, including net capital gains in some cases.
IRS Reporting None. The Community Foundation of Broward handles all IRC compliances. Annual tax return, including detailed financial schedules, filed by foundation.
Other
Privacy Donors may remain anonymous. Donors may remain anonymous, but IRS 990PF form lists officers, directors, and trustees.

 
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Broward County Inspiring Philanthropy over 25 years