Community Foundation Charitable Giving Fund & Private Foundation Comparison

Aug 22, 2019

By: Jordan Richardson, CAP®
Director of Charitable Giving

I’ve been fortunate to sit down with countless professional advisors throughout Central Iowa for a cup of coffee or a conversation in their office. Often in these meetings I ask what they’re hearing from their clients regarding charitable giving. It’s a fascinating window into the lives and interests of their clients, as well as the trusted relationship they have with them. The answers I get are quite diverse, but one topic that comes up regularly is private foundations. 

One recent conversation was with an advisor whose clients had expressed interest in establishing a private foundation. They had recently achieved a milestone life event and felt creating a private foundation was the logical next step as they sought to formalize their new level of charitable giving and support of their community. They felt a private foundation would provide a centralized landing spot and brand for their charitable giving now and for years to come. As the advisor and I continued the conversation we recognized that for this donor, and many others like them, every goal they hoped to achieve through a private foundation could be realized more simply and cost-effectively through a charitable giving fund. A charitable giving fund also provides unique advantages such as:

  • No required annual minimum distributions.

  • The ability to give anonymously with limited public disclosure.

  • Broad flexibility in terms of the organizations donors can support through the charitable giving fund.

  • Not being subject to excise tax on net investment income. 

  • The opportunity to take advantage of the Endow Iowa Tax Credit, a 25% state tax credit.

Perhaps you have had similar conversations. If so, I encourage you to learn more about the differences between charitable giving funds and private foundations by visiting our website or by reaching  out to me by email or by phone at (515) 244-0020 to find a time to connect.