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Are you considering creating a private foundation?
What about a commercial fund?
Some of our donors initially considered creating a private foundation. But the costs of start-up and administratoin, the lack of privacy, and limited tax deductibility associated with a private foundation led them to create a Donor Advised Fund with The Minneapolis Foundation instead.
Our donors have found they can make as great a charitable impact and enjoy the same level of recognition and family involvement a private foundation provides, while receiving greater tax benefits. And, unlike with commercial institutions, our donors can benefit from the expertise and personal service that come from working with an experienced, local philanthropic partner.
We invite you to compare the options for yourself:
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The Minneapolis Foundation |
Private Foundation |
Donor Advised Fund
at a Financial Institution |
| Services Available |
|
|
|
| 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
|
|
|
|
|
| Income Tax Deduction Limit |
|
|
|
| Cash gifts |
50%
|
30%
|
50%
|
|
|
|
|
| (percentage of Adjusted Gross Income - AGI) |
|
|
|
| Appreciated property |
30%
|
20%
|
30%
|
| Carry-over available |
yes
|
yes
|
yes
|
|
|
|
|
Amount Deductible
(subject to percentage limitations) |
|
|
|
| Appreciated publicly-traded stock |
fair market value (fmv)
|
fmv
|
fmv
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| Other appreciated property (long-term) |
fmv
|
basis
|
n/a*
|
|
|
|
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| Administration and Fees |
|
|
|
| Minimum Payout (5% req.) |
no
|
yes
|
in some cases
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| Start-up costs |
none
|
varies
|
none
|
| On-going requirements: |
|
|
|
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Separate tax return
|
no
|
yes
|
no
|
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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
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Consult your tax advisor to see how these general rules apply to you.
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