Donor-Advised Funds vs Private Foundations
Donor-advised funds and private foundations are both powerful ways to give. What’s right for you? We called out some of the differences and benefits between a Giving Fund and a private foundation.
|Row Title||Giving Fund||Private Foundation|
|Start-up time||Right Away||Several weeks to several months|
|Start-up minimum||$5,000||Varies; typically $1,000,000 to $10,000,000|
|Admin fees||0.60% to 0.15% of foundation assets (depending on balance)||Varies; generally 3 to 8% of foundation assets|
|Tax deduction limits (cash)1||60% of adjusted gross income||30% of adjusted gross income|
|Tax deduction limits (long-term appreciated securities)1||30% of adjusted gross income||20% of adjusted gross income|
|Required annual grant distribution||None2||5% of net asset value (with certain adjustments) annually|
|Excise taxes on net investment income||None||1% to 2%|
|Privacy||Recipient charity is not required to disclose names of contributors||Foundation tax returns must disclose information on donors, grants, investment fees, trustee names and staff salaries|
|Admin responsibilities||None||Keep track of records, manage assets, administer grants, and file tax returns|
1TIAA Charitable does not provide legal or tax advice. Please consult your tax advisor. Charitable deductions are subject to Internal Revenue Code limitations, based generally on your adjusted gross income and the character of any securities you contribute to your Giving Fund. There may also be state and local tax benefits to making contributions, but the content provided here relates to taxation at the federal level only. Availability of certain federal income tax deductions may depend on whether you itemize deductions. Charitable contributions of capital gain property held for more than one year are usually deductible at fair market value. Deductions for capital gain property held for one year or less are usually limited to cost basis. Before establishing a Giving Fund, taxpayers should seek advice based on their own particular circumstances from an independent legal or tax advisor.
2If a Giving Fund lies dormant for five years, TIAA Charitable will contact the donor to facilitate a grant of at least 5% of the fund balance.
Contributions to the Giving Fund are irrevocable. All recommendations from donors are subject to review and approval by TIAA Charitable.
TIAA Charitable does not provide tax advice. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
TIAA Charitable is the brand name for an independent public charity that maintains a donor-advised fund program. The TIAA name is a registered mark of Teachers Insurance of America and is used by TIAA Charitable pursuant to a license.
TIAA Charitable, Inc. has been recognized by the Internal Revenue Service as a tax-exempt public charity under Sections 501(c)(3) and 170(b)(1)(A)(vi) of the Internal Revenue Code of 1986, as amended (the “Code”).