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Private Foundation Alternatives

With a Dayton Foundation fund, you can have all of the advantages of a private foundation, avoid the disadvantages and gain the benefits and resources of a community foundation.

Private foundations are a great community asset and are ideal for some families. For others, bigger tax savings, less administrative hassles and lower operational costs associated with establishing a fund through The Dayton Foundation provide a more attractive alternative.

Whether you want to leave a bequest in your will or be an active donor during your lifetime, we can help you:

Group_6324.pngachieve your charitable goals;

Group_6326.pngsave on administrative and legal costs;

Group_6325.pngavoid restrictions and potential penalties by the IRS; and

Group_6327.pngachieve valuable tax savings.

Reasons to Establish an Invested Donor-Advised Fund or Family Foundation PlusSM through The Dayton Foundation vs. Establishing a Private Foundation

Invested
Donor-Advised Fund

Family
Foundation PlusSM

Private
Foundation (PF)

1. Legal entity

Established by The Dayton Foundation

Established by The Dayton Foundation Plus, Inc.

Must establish by PF; 501(c)(3) must be obtained by IRS

2. Tax status

Public charity

Public charity

Private foundation

3. Valuation of gifts, other than publicly traded stock

Fair market value

Fair market value

Cost basis

4. Tax deductibility of donations

60% of adjusted gross income (AGI) for cash gifts; 30% of AGI for long-term capital gains

60% of AGI for cash gifts; 30% of AGI for long-term capital gains

30% of AGI for cash gifts; 20% of AGI for long-term capital gains

5. Taxes paid

None

None

1.39% excise tax on net investment income; other excise taxes may apply

6. Tax returns, states and federal

Separate fund report not needed; donor’s privacy can be protected, if desired

Separate fund report not needed; donor’s privacy can be protected, if desired

Federal 990-PF filed by PF — grant history open to public inspection

7. Annual payout required

 

None

None

5% of net investment income

8. Governance

Not required, since donor advised

Not required, since donor advised

Board of Directors

9. Legal and tax counsel

Retained by The Dayton Foundation

Retained by The Dayton Foundation Plus, Inc.

Must retain counsel

10. Accounting and audit

All funds consolidated; no separate accounting is required

All funds consolidated; no separate accounting is required

Must establish accounting systems; separate audit may be needed

11. Grants

Suggested by donor and those appointed by donor to qualified charities; successor advisors must be alive at the time the fund is established.

Suggested by donor and those appointed by donor to qualified charities; successor directors do NOT have to be living at the fund’s inception, offering infinite succession.

Controlled by PF board

12. Assets

Investments pooled for lower fees and greater diversification of assets

Investments pooled for lower fees and greater diversification of assets

Some restrictions depending on type of assets held

13. Asset investment

Policy and mechanisms set; results measured and monitored

Policy and mechanisms set; results measured and monitored

Must implement and manage

14. Fund corpus

Ability to invade corpus determined by donor at inception of fund

Ability to invade corpus determined by donor at inception of fund

Board controlled; can grant all income and corpus

15. Knowledgeable staff

In place through The Dayton Foundation

In place through The Dayton Foundation

Must employ and manage

16. Administration

In place through The Dayton Foundation

In place through The Dayton Foundation

Must establish and maintain

17. Public report

Part of The Dayton Foundation report

Part of The Dayton Foundation report

Must comply with public inspection requirements

18. Operating expenses

Community Investment fee to The Dayton Foundation (9/10 of 1%) up to $1 million; 45 basis points between $1 million and $5 million

Community Investment fee to The Dayton Foundation (9/10 of 1%) up to $1 million; 45 basis points between $1 million and $5 million; 15 basis points over $5 million (Additional assessments may apply whenever balance is less than $250,000.)

Paid by asset income – some IRS limitations

19. D & O insurance, surety bonds

In place

In place

Must carry separate coverage

20. Gift acceptance policy and procedure

Established by The Dayton Foundation

Established by The Dayton Foundation

Must establish

21. Complex gift planning

In place through The Dayton Foundation

In place through The Dayton Foundation

Must obtain

Get Started Today

The Dayton Foundation offers a variety of fund options to fit your giving needs and financial plans.