Private Foundations

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Private Foundations

The County Community Foundation is an attractive alternative for many individuals and families who are interested in establishing their own private family foundation. With the County Community Foundation, you can advise on where your grants will be directed and have all the benefits of a private foundation without any of the tax receipting, legal, audit, accounting, administrative, investment and governance responsibilities that go with having a private foundation.

Thinking of Establishing a Private Foundation?

Community foundations offer different benefits and tax savings than private foundation. A community foundation is a public foundation with more than 50% of its directors dealing with each other at arm's length. Its capital is contributed from a variety of donors. In a private foundation, 50% or more of the directors/trustees do not deal with each other at arm's length and all or most of the capital is contributed by one person or persons not dealing with each other at arm's length.

Benefit

Community Foundation (CF)

Private Foundation

Assured legacy in perpetuity

  • Named funds that exist in perpetuity
  • Opportunity for major grants to be recognized
  • Named foundation
  • Longevity depends on long-term family interests and succession plans

More impact for every dollar you give

  • No taxable capital gains on gifts of appreciated securities
  • Immediate tax savings for most gifts of private company shares
  • Greater leverage for your dollars - access to other funds (within CF)
  • No taxable capital gains on gifts of appreciated securities
  • No charitable receipt is issued for gifts of private company shares

Simplicity and cost effectiveness

  • Handling of all accounting, tax returns, investment management, auditing, grant making and due diligence for an annual fee of 1.5% - 2% of the value of the capital
  • No cost to establish fund
  • Directors or Trustees must perform, hire staff or contract for these services which may be at a higher cost
  • Foundation must be incorporated and registered as a charity - cost effective when looking when over $5.0 million in assets

Outstanding community knowledge and impact

  • Expertise and advice in wide range of granting areas, including arts & culture, the environment, health, social services, recreation, education
  • Broad relationships with other government bodies, other funders in the city/region and agencies

 

  • Directors or Trustees must perform, hire staff, or contract for these grant making activities - often more narrow in scope

 

Flexibility to change focus or involvement over time

  • Choice in grant making involvement from year to year - donors can designate their fund to support particular charities, advise CF on grants from time to time, or allow the CF to direct grants based on community need
  • Opportunity to teach family members the value of philanthropy and community building through grantmaking
  • Opportunity to participate in community leadership initiatives of CF
  • Participation by family members is limited to direct activities of Foundation
  • Responsibility for grant making must be assumed by someone, even if family members lose interest in direct involvement over time