Community Foundation of South Central Kentucky

TYPES OF FUNDS

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INVESTMENT AND SPENDING HIGHLIGHTS

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COMPARING COMMUNITY AND PRIVATE FOUNDATION

From an investment standpoint the two types of foundations are very different. This PDF gives a side by side comparison of the two.

TRANSFERRING A PRIVATE FOUNDATION

Some of your clients who have an existing private foundation may be interested in the benefits of transferring it to the Community Foundation. Through a simple transfer process, your client may be able to avoid some of the hassles and costs of private foundation management.

There are two options to consider—donor-advised and other fund options and the supporting organization option. Each approach allows your clients to remain involved in grant making if that is their desire. At the same time they will be able to ensure that their intent, name and pattern of charitable giving are maintained in perpetuity if they wish.

Section 507 of the Internal Revenue Code permits termination of a private foundation in either trust or corporate form with distribution of its assets to a public charity. The two primary requirements for the termination of a private foundation are that the private foundation must distribute all of its net assets to one or more tax-exempt organizations and that each organization has been in existence for a continuous period of at least five years preceding the distribution. Our Community Foundation fulfills both of these requirements and the private foundation’s assets are typically used to establish a permanent donor-advised fund under a similar name.