Community Foundation Sonoma County | Compare Donor-advised Funds

Compare a Community Foundation (CF) Donor-advised Fund or a Supporting Organization with a Private Foundation

	Donor-advised Fund (DAF)	Supporting Organization (SO)	Private Foundation (PF)
1. 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
2. Tax Status	Public charity	Public charity	Private foundation
3. Gift valuation	Fair market value	Fair market value	Cost basis
4. 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
5. Taxes paid	None	None	1-2% excise tax on net investment income, possible penalty taxes
6. Tax Returns	Not required	Federal 990 filed by SO	Federal 990 filed by PF
7. Annual Payout Required	None	None	5% of net investment income
8. Governance	Not required	Separate Board of Directors; some restrictions	Board of Directors -- self dealing rules would need to be followed
9. Legal and Tax Counsel	Retained by CF	Optional	Would retain counsel
10. 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
11. Grants	Suggested by donor and those appointed by donor	Controlled by SO board. Resources of CF available	Controlled by PF board
12. Assets	Investments pooled	May hold unusual assets, e.g., real estate; may pool investments w/CF	Some restrictions depending on type of assets held
13. Investment Management	Policy and governance set, results measured and monitored	Can operate separately or with CF	Must implement and manage
14. 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
15. Knowledgeable Staff	In place at CF	Can employ own or contract with CF for staff support	Would employ and manage
16. Administration	In place through CF	Can establish or contract with CF for staff support	Must establish and maintain
17. Public Report	Part of CF report	Separate or can be part of CF report	Would advertise, print and distribute
18. 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
19. D and O Insurance, Surety Bonds	In place through CF	Cost charged to SO	Would carry separate coverage
20. Gift Acceptance Policy and Procedure	Established by CF	Established by CF	Must establish
21. Complex Gift Planning	In place through CF	Access to CF staff for assistance	Would obtain if necessary

Featured Donor

Greg Young, a Community Foundation donor advisor, talks of the rewards of supporting a nonprofit organization with a local branch in Sebastopol. "I belong to Bread for the Journey because I want to support local start-up organizations that need a little boost to achieve their vision. That boost is often money, but sometimes it's simply asking the right question like, 'What is a business plan and why do you need one?' Watching these seeds sprout is even more rewarding than I had dreamed; meeting people who have the passion and knowledge to make our community a better place is an amazing experience. It fills me with hope for the future... and joy."

Featured donors

Helen McStravick’s commitment to caring for those in need spans her lifetime and continues today through her donor-advised fund with the Community Foundation Sonoma County. After Harry’s death in 2001, Helen has continued to make grants from their donor-advised fund to support the mentally ill homeless population in Sonoma County, and she will leave the remainder of her estate to do the same. It’s comforting as she grows older, “a gift for me,” she says, and a way of honoring her husband’s wishes and extending her reach in the community. More…