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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 Foundation | Private Foundation | |
|---|---|---|
| Organization | Established 1993 | Not yet established |
| Tax exempt | 501(c)(3) status | Not yet established |
| 5% payout rule | Not subject to | May have to payout 5% of assets |
| Excise Tax on investment income | Do not pay | May be subject to tax |
| Tax Deductibility for Donors | Maximum under law | Uncertain; provisional status if approved |
| Mechanism for Receiving Gifts | Established mechanisms to handle gifts of real estate, securities & cash | Need mechanisms for receiving and managing of gifts |
| Language for Making Gifts & Creation of Funds | In place | Must create |
| Accounting | Computerized & independentCPA audit conducted each year | Must employ |
| Tax Return (Attorney General & IRS) | Prepared by CPA | Must prepare |
| Public Report | Annual report to public (over 2,000 copies distributed) | May be required |
| Acknowledge Donors | Donors recognized in publications and thanked individually for each gift | Need systems |
| Director and Officer Liability Insurance | In place | Needed (costly and difficult to obtain) |
| Liability Insurance | In place | Needed |
| Employee Bonding | Yes | Needed |
| Investment of Assets | Professional Investment Committee | Need to obtain |
| Organization Overhead | Spread over all our assets | Start-up costs and costs spread over smaller asset base |
| Credibility | Wide public acceptance | New organization |