| What about a commercial fund? Some of our donors initially considered creating private foundations. But the costs of start-up and administration, the lack of privacy and limited tax deductibility led them instead to create Donor Advised Funds with The Minneapolis Foundation. Our donors find they can make as great a charitable impact and enjoy the same level of recognition and family involvement as with a private foundation, yet with greater tax benefits. They also enjoy the expertise and personal service of an experienced, local philanthropic partner. Compare the options below and note some key differences that you should consider.
| | The Minneapolis Foundation | Private Foundation | Donor Advised Fund
at a Financial Institution | | | | | | Strategy formulation | yes | fee-based | no | | Grantmaking services | yes | fee-based | no | | Peer networking | yes | n/a | no | | Information on community issues | yes | fee-based | no | | On-line grant recommendations | yes | fee-based | yes |
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| | Cash gifts | 50% | 30% | 50% |
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| | Appreciated property | 30% | 20% | 30% | | Carry-over available | yes | yes | yes |
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| | Appreciated publicly-traded stock | fair market value (fmv) | fmv | fmv | | Other appreciated property (long-term) | fmv | basis | n/a* |
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| | Minimum Payout (5% req.) | no | yes | in some cases | | Start-up costs | none | varies | none | | On-going requirements: |
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| | Separate tax return | no | yes | no | | Accounting | no | yes | no | | Record-keeping | no | yes | no | | Investment management fees | varies | varies | varies | | Administrative expenses | 1% | varies | up to 1% | | Excise Tax required | no | yes | no | * Many commercial gift funds do not accept gifts of real property, such as real estate, privately held stock, S-corporation stock or artwork. Do you want the distinction of a private foundation without the hassle?
A Signature Fund is a donor advised fund that maintains a balance of at least $1 million and it provides the name recognition of a private foundation, along with the privacy, flexibility and tax advantages of a donor advised fund. HOW IT WORKS Signature Funds combine many features of a private foundation – such as independent identity and enhanced investment options – with all the benefits that donor advisors currently enjoy, including tax advantages, minimum administrative requirements, online access and a high level of personal service. Signature Funds also offer a higher level of customized philanthropic support, including a variety of ways to help donors and their families accomplish their unique charitable goals. A Signature Fund may use the word "Foundation" in its name with limited reference to The Minneapolis Foundation. Customized stationery is used for all grant correspondence, and checks bear the Signature Fund name. The administrative and investment fees for Signature Funds are the same as those for donor advised funds. Any donor advised fund with assets of $1 million or more can become a Signature Fund upon the donor's request. |