If your client is looking for a highly personal way of giving without all the guidelines, responsibilities, and costs that come along with establishing and maintaining a private foundation, then a Donor-Advised fund at the Greater Poweshiek Community Foundation could be the right charitable vehicle for them.

Items to ConsiderPrivate FoundationGPCF Donor Advised Fund
Setup procedure Must incorporate and apply for IRS tax-exempt approvalSimple agreement. Can be set up in as little as one day
Ongoing costs Liability insurance, direct administrative costsPooled administration, low costs
Tax Benefits
CashUp to 30% of adjusted gross incomeUp to 50% of adjusted gross income
Appreciated Stock Up to 20% of adjusted gross incomeUp to 30% of adjusted gross income
Closely held stock Deduction limited to basisDeduction at fair market value
Excise TaxesUsually 2% of investment income annuallyNone
Reporting requirementsAnnual 990-PF must be filed by foundation or hired staffNone required of the donor. Community foundation handles all reporting.
GrantmakingMust research and identify agencies/programs to fundCommunity foundation program staff educates donors regarding worthy agencies and programs; provides information on qualified giving opportunities
Grant managementMust ensure all recipients are qualified 501(c)(3) organizationsCommunity foundation verifies organization’s status. Plus, donors can access the community foundation’s grantmaking services
Distribution requirements5% annual distribution required Self-dealing restrictionsNone. Donors can make grant recommendations at their discretion.
PrivacyTax return is public recordDonor may choose to remain anonymous