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DONOR-ADVISED FUND (DAF) SUPPORTING ORGANIZATION (SO) PRIVATE FOUNDATION (PF)

Legal Entity Established by CF Must be established by SO; 501(c)(3) status must be obtained from IRS Must be established by PF; 501(c)(3) status must be obtained from IRS

Tax Status Public charity Public charity Private foundation

Gift valuation Fair market value Fair market value Cost basis

Tax Deductibility of Donations 50% of Adjusted Gross Income (AGI) for cash gifts; 30% of AGI for long-term capital gains 50% of AGI for cash gifts; 30% of AGI for long-term capital gains 30% of AGI for cash gifts; 20% of AGI for long-term capital gains

Taxes paid None None 1-2% excise tax on net investment income, possible penalty taxes

Tax Returns Not required Federal 990 filed by SO Federal 990 filed by PF

Annual Payout Required None None 5% of net investment income

Governance Not required Separate Board of Directors; some restrictions Board of Directors — self dealing rules would need to be followed

Legal and Tax Counsel Retained by CF Optional Would retain counsel

Accounting and Audit All funds pooled, no separate audit report Can contract w/CF for accounting services; audit consolidated with CF, with separate audit for SO required Must establish accounting systems; separate audit may be needed

Grants Suggested by donor and those appointed by donor Controlled by SO board. Resources of CF available Controlled by PF board

Assets Investments pooled May hold unusual assets, e.g., real estate; may pool investments w/CF Some restrictions depending on type of assets held

Investment Management Policy and governance set, results measured and monitored Can operate separately or with CF Must implement and manage

Fund Corpus Ability to expend corpus determined by Donor at inception of fund Board controlled, can grant all income and corpus unless restricted by donor Board controlled, can grant all income and corpus

Knowledgeable Staff In place at CF Can employ own or contract with CF for staff support Would employ and manage

Administration In place through CF Can establish or contract with CF for staff support Must establish and maintain

Public Report Part of CF report Separate or can be part of CF report Would advertise, print and distribute

Operating Expenses Paid to CF; currently 1.75% annually Individually negotiated; may be paid by grant to CF Paid by asset income — some IRS limitations

D and O Insurance, Surety Bonds In place through CF Cost charged to SO Would carry separate coverage

Gift Acceptance Policy and Procedure Established by CF Established by CF Must establish

Complex Gift Planning In place through CF Access to CF staff for assistance Would obtain if necessary

 


For more information, please contact J Mullineaux at 707.303.9620.