Community Foundation of the Fox River Valley
(630) 896-7800

Community Foundation Or Private Foundation

Advantages To Creating A Component Fund Within The Community Foundation
Community Foundation Private Foundation
Organization Established Must establish
Status 501(c)(3) tax status and
170(b)(1)(A)(vi) public charity
Must establish
Funds Required $500 to create More substantial funding required
Time to Establish One hour or less Time-consuming process
Organization Overhead No fee on assets under $10,000
0.50% on assets over $10,000
0.25% on assets over $1,000,000
Reduced fees for non-profits & churches
Administrative expenses plus excise tax
Payout Requirements None 5% annual payout of assets
Excise Tax None 1%-2% of net investment income including capital gains
Legal/Accounting Services Provided May need to obtain
Office/Staffing Provided May need to obtain
Tax Returns/Audit/
Public Disclosure
Provided Need to provide
Director’s Liability Covered May need to obtain
Monitoring of Investments Provided Need to provide
Monitoring of Regulatory Changes Provided Need to provide
Donor’s Role in Selection of Grantees Donor’s role determined by type of fund created. Background checks on charitable status of grantees provided. Donor specifies grants and has more control, yet donor must research and document charitable status of grantees.
Grants for Civic Emergencies, New Organizations, Self-Help Groups Background checks to determine charitable intent of activity Must meet series of statutory and regulatory requirements
Awards to Individuals Allowed through Scholarship Program already in place.  Not allowed through Advisory Funds. Must seek approval from IRS for such grants, obtain pre-grant and post-grant reports from recipients, and submit requests to IRS.
Redirection of original gift whose purpose has become obsolete or incapable of fulfillment Provided through Variance Power In cases of trusts and charitable bequests, direction may be needed from the courts through judicial cy pres action
Public Recognition Grants awarded in donor’s name or anonymity provided upon request. Must provide or rely on grantee organization. Anonymity not permissible.
Governing Board Automatic provision for board renewal May experience difficulty in bridging the generations
Income Tax Deductibility by Individual The deduction for charitable contributions of cash or property cannot exceed 50% of adjusted gross income (AGI).  Property is valued for contribution deduction purposes at fair market value (FMV).  However, FMV cannot exceed donor’s cost except in case of “long-term capital gain property” as described below.Property, the sale of which would result in a long-term capital gain, can be valued at FMV even if that value exceeds cost.  However, in that case, deduction is limited to 30% of AGI.  The 50% of AGI limit can be elected if donor chooses to value long-term capital gain property at lesser of cost or FMV.Donor avoids capital gain tax on appreciation

Special rules apply to contribution of tangible personal property

Unused deductions may be carried over for 5 years

Deduction for charitable contribution of cash or property to private foundations – other than foundation described in Code section 170(b)(1)(E) – is limited to 30% of AGI.  Property is valued at lesser of FMV or cost except in the case of “publicly traded stock” which may be valued at FMV provided the sale of that stock would result in a long-term capital gain to donor.  The deduction for contribution of “publicly traded stock” is limited to 20% of AGI.Donor avoids capital gain tax on appreciationSpecial rules apply to contribution of tangible personal property

Unused deductions may be carried over for 5 years

(630) 896-7800