Community Foundation

Private Foundation

Tax treatment of cash gifts

Deductible up to 50 percent of Adjusted Gross Income (AGI)

Deductible up to 30 percent of AGI

Tax treatment of gifts of appreciated publicly traded securities

Full market value deduction up to 30 percent of AGI

Full market value deduction up to 20 percent of AGI

Tax treatment of closely held stock or real estate

Full market value deduction up to 30 percent of AGI

Deduction limited to donor's cost basis, up to 20 percent of AGI

Excess business holdings

No restriction

Can hold no more than 20% of a business

Excise taxes

No excise taxes

Excise tax of 1-2 percent of net investment income annually

Required payout

No required payout. Can accumulate income toward a sizable project or grant. Has flexibility to hold low-yield property

Required to expend 5 percent of asset value annually, whether or not the Foundation's investments earn that amount

Incorporation and tax exemption

Automatically covered by Toledo Community Foundation (TCF)

Must create corporation and apply for tax exemption

Privacy

Individual donors or grants can be kept private. If donor wishes, TCF can serve as a buffer between donor and grant-seekers, allowing donors to remain anonymous.

Foundation required to file detailed tax returns on grants, investment fees, trustee fees, staff salaries, etc. These are public records and are compiled into directories for grant-seekers.

Liability and insurance

Automatically covered by TCF's liability and office insurance policies

Any directors and officer's liability insurance, employee bonding, and office insurance must be separately purchased

Investment, accounting, audit, and tax returns

TCF handles all investments and accounting.   TCF files annual tax return and provides annual independent audit.

Trustees must perform, contract, or hire staff for these services.

General administration

TCF handles all financial and administrative management

Trustees must perform, contract, or hire staff for these services.

Grant administration including new Patriot Act requirements

If donor wishes, TCF can assist in establishing grant making guidelines and philanthropic goals, identifying potential recipients, investigating applicants, making grant payments, and monitoring performance.

Trustees must perform, contract, or hire staff for these services.

Costs

The TCF's fee is .95 percent of the fund balance annually.

In 2001, the average administrative cost of private foundations was 1.4 percent of assets. Private foundations of under $5 million had average costs of 6.27 percent of assets.