The Foundation for Enhancing Communities offers compelling advantages over other charitable options. Discover the benefits of partnering with us.
| Items to Consider | TFEC Donor Advised Fund | Private Foundation | Commercial Gift Fund (i.e. – Fidelity) |
Direct Gift to a Nonprofit Organization |
| Start-up Considerations: | ||||
| Costs | None | Several thousand dollars for legal and accounting expenses and filing fees | None | N/A |
| Time Frame | Immediate | Several months | Immediate | N/A |
| Minimum Contribution | $10,000 over 5 years | Not cost-effective unless $8 million or more | Usually $10,000 to $25,000 for individuals | N/A |
| Investment and Tax Considerations: | ||||
| Investment | Donor may choose from TFEC’s investment options | Donor appointed board controls investments | Donor may choose from among firm’s investment pools | N/A |
| Tax Status | Covered under TFEC’s public nonprofit federally tax exempt status | Must apply to IRS for private foundation federal tax-exempt status | Covered under nonprofit federally tax exempt status of corporate entity’s charitable subsidiary | Covered under federally tax exempt nonprofit organization’s public charity status |
| Income Tax Dedications for Gifts of: | ||||
| Cash | Up to 50% of federal adjusted gross income | Up to 30% of federal adjusted gross income | Up to 50% of federal adjusted gross income | Up to 50% of federal adjusted gross income |
| Publicly Traded Securities | Fair market value up to 30% of federal adjusted gross income | Fair market value up to 20% of federal adjusted gross income | Fair market value up to 30% of federal adjusted gross income | Fair market value up to 30% of federal adjusted gross income |
| Real Estate & Closely Held Securities | Fair market value up to 30% of federal adjusted gross income | Deductible at cost basis | Fair market value up to 30% of federal adjusted gross income; usually not accepted | Fair market value up to 30% of federal adjusted gross income; usually not accepted |
| Grantmaking: | ||||
| Grantmaking Involvement and Control | Donor recommends grants to qualified nonprofit organizations, subject to approval by TFEC’s Board of Directors | Donor appointed board controls grantmaking decisions | Donor recommends grants to qualified nonprofit organizations, subject to approval by trustees of the gift fund | Donor makes gifts based on their own research and intuition; gifts are made directly to the nonprofit organization and control is limited to initial gift decision |
| Grantmaking Expertise |
Staff can help identify and assess grantees, provide input on community needs and nonprofit organizations | Must arrange and support its own grantmaking and monitoring structure | Most do not offer personalized advice on grantee selection | N/A |
| Distribution Requirements | None | At least 5% of net asset value annually; 30% penalty tax on undistributed amount | Varies; some require a minimum of 5% of the fund’s net assets on a five-year rolling basis | N/A |
| Annual Administrative Requirements: | ||||
| Fees | 0.40% for Investment Management and 1.70% for Administration for a total of 2.10% (prorated monthly) | Grantmaking, administrative and investment support must be covered |
Based on size of fund, usually starting at 1% of assets and declining for larger funds |
N/A |
| Taxes | None | Federal excise tax of 2% of net investment income, including net capital gains | None | N/A |
| Reporting Requirements | None | Annual federal income tax return, including detailed financial schedules | None | N/A |
| Administrative Requirement | None | Staff salaries and office space to run daily foundation operations | None | N/A |
| Privacy | Donors may remain anonymous | Donors may remain anonymous, but IRS 990 form lists officers, directors and trustees | Donors may remain anonymous | Dependent on nonprofit organization’s gift giving policies |
TFEC provides a streamlined and personalized approach to giving. We offer a variety of tools to help you achieve your charitable goals. Major options for giving entail varying costs and benefits. TFEC or your professional advisor can help you review options for custom giving solutions based on your timing preferences, your giving focus, and other variables. You can make a gift of cash, stocks, bonds, real estate or other assets to TFEC. Most charitable gifts qualify for maximum tax advantage under federal law. Most states do not have a gift tax, but do have an inheritance or estate tax.
For more information on how to start achieving your charitable goals, please contact Janice R. Black, President and CEO at jblack@tfec.org or Jennifer Doyle, Director of Development & Community Investment, at jdoyle@tfec.org.
