Your client is thinking about establishing a private foundation, but is looking for a simpler, more cost-effective way. Other alternatives can help your clients meet their charitable, financial, and estate planning needs. CICF can help you and your client analyze the pros and cons of creating a donor-advised fund, a supporting foundation (Type 1 supporting organization), or a private foundation.

Donor-Advised Fund:  allows donors on an ongoing basis to make suggestions on which publicly-supported 501(c)(3) not-for-profit organizations should receive grants. These funds also provide a way to communicate family or individual values, or to be anonymous in giving.  Contributions to donor-advised funds qualify for all available tax deductions and benefits as provided by current law.  More about donor-advised funds.
 
Supporting Foundation:  a “Type I Supporting Organization” is a separate legal charitable entity connected to CICF.  Donors retain control of grantmaking, investment, and continuity decisions while avoiding the regulatory difficulties of a private foundation.  Gifts to a supporting organization of CICF are fully deductible at the current fair market value, including publicly traded or closely-held stock and other illiquid assets.  More about supporting foundations.

Private Foundation:  allows extensive donor control over board selection, making grants, and running services.  It allows the most flexibility in the family’s paid or volunteer involvement. However, a private foundation faces the highest regulatory burdens and lowest tax benefits of the three options.

Customizing Your Client’s Options
CICF works with many individuals and families to extend the effectiveness, family involvement, and tax advantages of their charitable giving.  Some choose a donor-advised fund or supporting foundation over a private foundation, while others open a donor-advised fund or supporting organization as a companion to their private foundation.  Others have closed a trust or foundation with a gift to a fund at CICF to ensure their charitable mission and pattern of charitable giving remain forever.  CICF can work with you and your clients in a confidential, no-cost setting to explore their best options. 

Contact any member of our development team at 317.634.2423:
• Rob MacPherson, ext. 509 or robm@cicf.org
• Brad Little, ext. 301 or bradl@cicf.org
• Jan Edmondson, ext. 510 or jane@cicf.org
• Tony Macklin, ext. 505 or tonym@cicf.org

Read more
Transferring Private Foundations
View a comparison chart of donor-advised funds, supporting organizations, and private foundations