Legal Details and Tax Benefits

This table displays the individual tax benefit and legal detail distinctions between different kinds of charitable giving vehicles or options. You’ll notice several benefits to establishing a fund or funds with a community foundation vs. starting your own private foundation. The two best legal/tax benefits of working with a community foundation include avoiding annual taxes of investment income and having no payout requirements. There are also no upfront costs to establishing a fund with La Crosse Community Foundation, and no ongoing operational costs apart from the nominal annual management fee assessed by the Foundation to administer the funds.

 Private FoundationLCF Community Impact or Designated FundsLCF Donor Advised FundLCF Supporting Organization
AdministrationDetail annual filing with IRSLCF carries out all record-keeping and accountingLCF carries out all record-keeping and accountingLCF carries out all record-keeping and accounting
Grantmaking Expertise For larger foundations, a professional staffLCF staff assistance to review and monitor proposalsLCF staff assistance to review and monitor proposalsLCF staff assistance to review and monitor proposals
ControlTrustees have complete control of distributions and responsibility for asset managementLCF Board of Directors responsible for grantmaking to carry out donor's intent and asset managementDonor advisors recommend grant recipients to LCF Board for approval; Board responsible for managing assetsOwn Board of Directors responsible for grantmaking and asset management
CostLegal and accounting fees, insurance, office space, staff and operational costsNo cost to establish; investment and management feesNo cost to establish; investment and management feesCost to establish; investment and management fees
Legal IdentitySeparate nonprofit entity(Donor's choice of name) Fund of LCF(Donor's choice of name) Fund of LCFDonor's choice of name; separate nonprofit entity affiliated with LCF
Tax StatusPrivate FoundationPublic CharityPublic CharityPublic Charity
Taxation of Investment Income2% AnnuallyNoneNoneNone
Payout Requirement Annual grants must equal 5% of corpusNoneNoneNone
Deductibility of Gifts Deductible up to 30% of adjusted gross income; gifts of appreciated property deductible at fair market value (up to 20% of AGI)Deductible up to 50% of adjusted gross income; gifts of appreciated property deductible at fair market value (up to 30% of AGI)Deductible up to 50% of adjusted gross income; gifts of appreciated property deductible at fair market value (up to 30% of AGI)Deductible up to 50% of adjusted gross income; gifts of appreciated property deductible at fair market value (up to 30% of AGI)