Private Foundation

Requirements and Restrictions

1. Donor must establish a separate nonprofit corporation and apply for federal tax exemption
2. Donor must operate own grant program
3. Donor is responsible for investments, accounting, and financial reporting

Tax Deductions

1. Donor currently receives a fair market value charitable deduction only for gifts of publicly traded stock. The deduction for gifts of other appreciated property, such as real estate or closely-held stock, is limited to the donor cost basis.
2. Gifts of cash are deductible up to 30% of the donor's adjusted gross income with a five-year carryover for any excess.
3. Gifts of appreciated property are deductible up to 20% of the donor's adjusted gross income with a five year carryover for any excess.

Federal Tax

Subject to federal tax of up to 2% annually on invested income.

Pay-out Requirement

IRS requires an annual grant pay-out of 5% of assets.