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 Foundation | LCF Community Impact or Designated Funds | LCF Donor Advised Fund | LCF Supporting Organization | |
|---|---|---|---|---|
| Administration | Detail annual filing with IRS | LCF carries out all record-keeping and accounting | LCF carries out all record-keeping and accounting | LCF carries out all record-keeping and accounting |
| Grantmaking Expertise | For larger foundations, a professional staff | LCF staff assistance to review and monitor proposals | LCF staff assistance to review and monitor proposals | LCF staff assistance to review and monitor proposals |
| Control | Trustees have complete control of distributions and responsibility for asset management | LCF Board of Directors responsible for grantmaking to carry out donor's intent and asset management | Donor advisors recommend grant recipients to LCF Board for approval; Board responsible for managing assets | Own Board of Directors responsible for grantmaking and asset management |
| Cost | Legal and accounting fees, insurance, office space, staff and operational costs | No cost to establish; investment and management fees | No cost to establish; investment and management fees | Cost to establish; investment and management fees |
| Legal Identity | Separate nonprofit entity | (Donor's choice of name) Fund of LCF | (Donor's choice of name) Fund of LCF | Donor's choice of name; separate nonprofit entity affiliated with LCF |
| Tax Status | Private Foundation | Public Charity | Public Charity | Public Charity |
| Taxation of Investment Income | 2% Annually | None | None | None |
| Payout Requirement | Annual grants must equal 5% of corpus | None | None | None |
| 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) |
