|
Waco Foundation Donor-Advised Funds |
Private Foundation |
Commercial Gift Fund |
| Investment and Tax Considerations of: |
| Investments |
Donor may choose from Waco Foundation's four investment pools. |
Donor-appointed board controls investments. |
Donor may choose from among firm's investment pools. |
| Tax Status |
Covered under Waco Foundation's public charity status |
Must apply to IRS for private foundation tax exempt status |
Covered under nonprofit status of corporate entity's charitable subsidy |
| Income Tax Deduction for Gifts of: |
| Cash |
Up to 50% of adjusted gross income |
Up to 30% of adjusted gross income |
Up to 50% of adjusted gross income. |
| Publicly Traded Securities |
Fair market value up to 30% of adjusted gross income |
Fair market value up to 20% of adjusted gross income |
Fair market value up to 30% of adjusted gross income. |
| Real Estate & Closely Held Securities |
Fair market value up to 30% of adjusted gross income |
Deductible at cost basis |
Fair market value up to 30% of adjusted gross income. Usually not accepted. |
| Distribution Requirements |
None |
At least 5% of net asset value annually |
Varies; some require a minimum of 5% of the fund's net assets on a five-year rolling basis |
| Grantmaking |
| Grantmaking Recommendations |
Donor recommends grants to qualified nonprofit groups. Grants are approved by Waco Foundation board of trustees. |
Donor-appointed board controls grantmaking. |
Donor recommends to qualified nonprofit groups. Grants are approved by trustees of the gift fund. |
| Grantmaking Expertise |
Staff can help identify and assess grantees, provide input on community needs and local nonprofits. |
Must arrange and support its own grantmaking and monitoring structure |
Most do not offer personalized advice on grantee selection |
| Start-up Considerations |
| Costs |
None |
Several thousand dollars for legal and accounting expenses and filing fees |
None |
| Time Frame |
Immediate |
Several months |
Immediate |
| Minimum Contribution |
None |
Not cost-effective unless $8 million or more |
Usually $10,000 to $25,000 for individuals |
| Minimum Gift Size |
None |
None |
Usually minimum of $500 |
| Annual Administrative Requirements |
| Fees |
.75% annually |
Grantmaking, administrative and investment support must be covered. |
Based on size of fund, usually starting at 1% of assets and declining for larger funds. |
| Taxes |
None |
Excise tax of 2% of net investment income, including net capital gains |
None |
| Reporting Requirements |
None |
Annual tax return, including detailed financial schedules |
None |
| Privacy |
Donors may remain anonymous. |
Donors may remain anonymous, but IRS 990 form lists officers, directors, and trustees. |
Donors may remain anonymous. |