What is the difference between community and private foundations?
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 Community 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 percent of adjusted gross income versus 30 percent for a private foundation. Gifts of appreciated property can be credited for 30 percent versus 20 percent for a private foundation. There is no excise tax on community foundations as there is on private foundations.
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What basic tips do donors need to keep in mind?
The Community Foundation is a resource you can use to know where you can make a real difference in the community. If you’re interested in a specific issue, need or opportunity, we can provide you with the names of local charities effectively focusing on that area.
Budget for Giving
Put your philanthropic activities in your budget just as you would financial obligations.
Be an Informed Giver
Don’t be afraid to ask questions when you’re asked to give, including the specific name of the solicitor and their relationship to the organization, how much of your gift will be used for overhead, and the specific projects the money will fund. Give only when you feel comfortable that your grants will be going to support an organization you know and believe in.
Keep Your Records
For gifts you make to your charitable fund at the Community Foundation, we will provide a properly worded receipt as a confirmation of these tax-deductible contributions. Gifts made from your fund will not be recognized with a receipt since you have already received a deduction for the original gift.
Ask about Matching Gifts
Many employers match gifts made by their employees or make grants to organizations recommended by employees. Be sure to ask your company.
Your Gift Can Be Confidential
If you prefer to have gifts from your charitable fund remain confidential, please let us know. Your gifts can be made anonymously.
Consider Other Ways to Give
There are many ways to give including bequests, life insurance, IRAs, charitable remainder trusts, charitable lead trusts, charitable gift annuities, gifts in kind, and endowments. We’ll work with you, your financial adviser and your attorney create the best plan for you and your family.
In addition to financial support, consider giving your time and skills. You’ll help the organization and also make contacts, hone your skills, and learn more about the charities you want to support.
You Can Say No
Give generously when you can, but if you’re unsure or feel uncomfortable, don’t be afraid to say no. If you want to consider a donation, ask for more information and take time before making your decision.