Comparisons
 

Donor Advised Funds
 

Private Foundations
 

Creating the Foundation 

Established at RMCF by
a simple agreement

Nonprofit corporation or trust organized as a private foundation 

Tax Exempt Status

Shares the public charity tax exempt status of RMCF, as a "component" of RMCF

Must apply for private foundation tax exempt status from the IRS

Start-Up Cost

No cost to donor

Similar to a corporate start-up requiring substantial legal, accounting, and operational start-up costs

Recommended Size

$5,000 minimum
$50,000 recommended

Substantial assets required

CharitableDeductions
for Cash Gifts

Tax deduction of up to 50% of
adjusted gross income (AGI)

Tax deduction of up to 30% of adjusted gross income (AGI)

Charitable Deductions
for Appreciated Property

Tax deduction for full fair market
value of marketable securities
and other property. Tax deduction
available up to 30% of AGI

Tax deduction may be taken for fair market value of marketable securities up to 20% of AGI. Tax deduction for other property is limited to the lower of cost or fair market value

Donor Control

Donor makes advisory grant recommendations; final decisions rest 
with RMCF's board of directors 

Donor retains complete control over investments and grant making, subject to IRS requirements 

Payout Requirements

Do not apply

Must pay out for charitable purposes at least 5% of its asset value annually; regardless of its income

Administrative Concerns
(personnel, facility, gift
and grant management)

Services provided by RMCF

Must establish and/or obtain these services

Annual Administrative
Costs

1% or less, depending on fund balance
($100 minimum) plus minimum
investment expense

Administration can be costly

Annual Taxes

None

Subject to excise tax of up to 2% of investment income and realized
capital gains 

Annual Tax Filings and Returns
(990 Report)

Not required (reported as part of
RMCF's annual reporting)

Must be filed by the private foundation with required reporting schedules

Investments

Fund assets are professionally invested
through RMCF's investment program

Must research, secure, and carefully monitor its own investment program

Fiduciary Responsibility

RMCF fulfills the associated
fiduciary responsibilities

The private foundation board has
fiduciary responsibility

Liability and Risk
Insurance

Provided by RMCF

Must be purchased by the
private foundation 

Privacy

Donors may remain anonymous

Foundation files IRS form 990-PF, which is a public record