COMMUNITY FOUNDATIONS

Requirements and Restrictions

1. Donors establish individually named funds
2. Donors can oversee grant making activities of their funds
3. Foundation files one federal and one state report for all of its funds

Tax Deductions

1. Donor receives 100% fair market value charitable deduction for gifts of publicly traded stock, closely-held stock, real estate, and other long-term capital gain property.
2. Gifts of cash are deductible up to 50% of the donor's adjusted gross income with a five-year carryover for any excess.
3. The fair market value of gifts for appreciated securities or real estate are deductible up to 30% of the donor's adjusted gross income with a five-year.

Federal Tax

1. The Foundation is exempt from most federal and state taxes.

Pay-out Requirement

1. No IRS requirement that any amount be paid out annually in grants.

 

 

PRIVATE FOUNDATIONS

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

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

Pay-out Requirement

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