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Private Foundations vs. Foundation Funds

Why create a Foundation Fund at the Washington County Community Foundation

Foundations provide donors and their families with an efficient and effective way to accomplish their philanthropic goals. For a more thorough discussion about establishing your Foundation Fund, contact the WCCF at (724) 222-6330 or via email.

Reasons for Establishing a Fund at the Washington County Community Foundation rather than a Private Foundation

Community FoundationPrivate Foundation
OrganizationEstablished 1993Not yet established
Tax exempt501(c)(3) statusNot yet established
5% payout ruleNot subject toMay have to payout 5% of assets
Excise Tax on investment incomeDo not payMay be subject to tax
Tax Deductibility for DonorsMaximum under lawUncertain; provisional status if approved
Mechanism for Receiving GiftsEstablished mechanisms to handle gifts of real estate, securities & cashNeed mechanisms for receiving and managing of gifts
Language for Making Gifts & Creation of FundsIn place Must create
AccountingComputerized & independentCPA audit conducted each year Must employ
Tax Return (Attorney General & IRS)Prepared by CPAMust prepare
Public ReportAnnual report to public (over 2,000 copies distributed)May be required
Acknowledge DonorsDonors recognized in publications and thanked individually for each giftNeed systems
Director and Officer Liability InsuranceIn placeNeeded (costly and difficult to obtain)
Liability InsuranceIn placeNeeded
Employee BondingYesNeeded
Investment of AssetsProfessional Investment CommitteeNeed to obtain
Organization OverheadSpread over all our assetsStart-up costs and costs spread over smaller asset base
CredibilityWide public acceptanceNew organization