Alternatives to Private Foundations
the difference between a private family foundation and a fund with CFSKY...
People often establish a private family foundation because they don’t know that in many cases working through a community foundation offers an easier alternative. In addition to the tax benefits, a fund through the Community Foundation can be established very quickly. Additionally, the staff of the Foundation takes care of auditing and financial reporting requirements. Many community foundation donors are also pleased by the fact that community foundations have none of the annual payout requirements of private foundations. That means donors may take the time necessary to be thoughtful in recommending charities to receive grants from their fund.
Community foundations combine the tax advantages of a public charity with the lasting quality of a private foundation. Gifts of cash and ordinary income property to a community foundation are deductible up to 50% of adjusted gross income versus 30% for a private foundation. Gifts of appreciated property can be credited for 30% versus 20% for a private foundation. There is no excise tax on community foundations as there is on private foundations.
weighing the benefits of private and public charity...
surprised by demands
For philanthropists considering options, as well as private foundation trustees interested in simpler solutions, practical alternatives are available through The Community Foundation of South Central Kentucky.
Assets of a private foundation may be used to establish a Donor Advised Fund, Unrestricted Fund, Field of Interest Fund, Scholarship Fund or Designated Fund. Depending on the type of fund that is established, the private foundation’s board of directors often stays involved in setting grantmaking priorities, advising on grant awards and assessing grant success.