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Toledo Community Foundation

Your client may enjoy overseeing a private family foundation, but private foundations have a number of financial and administrative disadvantages when compared to public charities. These drawbacks include greater investment restrictions, mandatory distribution and reporting responsibilities, fewer tax benefits and the sometimes-heavy burden of personally administering a private foundation.

Comparison of Toledo Community Foundation versus a Private Foundation

 

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

There are no fees to establish a fund at TCF; however, there is an annual administrative fee ranging from .40 to 1.45% based on fund type plus a bank/investment fee of .25%.  

Recent figures show that private foundations of under $5 million had average costs of 6.27% of assets' and the average administrative cost of private foundations was 1.4% of assets. 


Click here for complete discussion of creating a fund with Toledo Community Foundation

What type of fund can your client create?  

What type of gift options can your client use to create a fund with Toledo Community Foundation?

Click here to review Gift Options.

Does your client already have a fund and would like to make a gift?  Go to Give Today with this click.

Click here to review Fund Types.

Contact Us

300 Madison Avenue
Suite 1300
Toledo, OH 43604
P     419.241.5049

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