Why Recommend CFCG?
Your clients trust you to give them advice on how they can fulfill their charitable wishes, meet their financial planning goals, and enjoy the maximum tax advantages. The chart below will help you compare a donor advised fund at CFCG, a commercial gift fund and a private foundation so that you can confidently recommend what is best for your client.
Is a fund at CFCG right for your client?
- Gifts to the Foundation receive the most favorable tax treatment because CFCG is a 501c3 public charity.
- CFCG’s professional staff can provide in-depth advice on local charitable organizations and projects.
- Your client can remain completely anonymous through a fund at CFCG.
- Donors can choose unlimited successor advisors to advise their fund when they are no longer able.
|DONOR ADVISED FUNDS||PRIVATE FOUNDATION|
|Donor Control||Donor recommends grants to qualified nonprofits. Grants are approved by the Community Foundation’s Executive Committee and the investments are overseen by the Finance Committee of the Board of Directors.||Donor appoints Board, which controls investments and grantmaking.|
|Tax Status||Public charity—as a fund under the Community Foundation’s public charity status.||Private charity—as a separate 501(c)(3) organization under Section 509(a).|
|Income Tax Deductions Gifts of||Cash: Up to 60% of AGI.
Stock: FMV up to 30% of AGI.
Real Estate: FMV up to 30% of AGI.
|Cash: Up to 30% of AGI.
Stock: FMV up to 20% of AGI.
Real Estate: Cost basis up to 20% of AGI.
|Philanthropic Services||Professional staff is available to develop strategy, provide input on community needs, and identify, assess, and verify non-profit status of grantees. Donor education, family engagement, and peer networking provided as desired.||Board must arrange and support their own grantmaking, monitoring and administrative structures.|
|Start-up Considerations||Initial costs: None
Minimum contributions: None
Time to establish: Immediate
|Initial costs: $3,000 to $6,000 for legal expenses and filing fees.
Minimum contributions: Typically $10 million or more for cost efficiency
Time to establish: Several months
|Annual Admin Requirements||Fee: Tiered fee schedule beginning at 1% and decreasing as the size of the fund increases, plus investment management fees. *Scholarship funds have a minimum annual fee of $500.
|Fee: Several thousand dollars for legal and accounting expenses and filing fees, plus staff and costs to operate the Foundation.
Reporting: 990-PF tax form must be filed annually.
|Annual Distribution Requirements||No annual grant distributions are required, but regular grant making is strongly encouraged at a recommended spending rate of 4% per year.||5% of net assets annually, otherwise a 30% penalty tax.|
|Excise Tax||None||1% to 2% of net investment earnings.|
|Continuity||Donor may name successor advisor(s) to the fund.||May continue to future generations.|
|Privacy||Donor and fund activity may remain anonymous.||Officers, Directors, Trustees, corpus and grants listed in IRS Form 990-PF.|