When you’re working on the charitable components of a client’s estate or financial plan, one of the first areas you’ll likely explore is the structure. Certainly you are familiar with both private foundations and donor-advised funds as useful charitable giving tools. Before you jump into one or the other for a particular client, though, it’s important to review the similarities and differences between the two so that you can best achieve your client’s goals.

To help you evaluate a client’s options, here are three common myths about the differences between private foundations and donor-advised funds.
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Myth #1: Donor-advised funds are all the same and only private foundations can be customized
Private foundations will always differ from donor-advised funds in important ways, not only because of their status as separate legal entities and the deductibility rules for gifts to these entities, but also because of the opportunities to customize governance. But it is a mistake to assume that a donor-advised fund is a cookie-cutter vehicle. Indeed, “donor-advised fund” is simply a term used to describe the structure of a fund and its relationship with a sponsoring organization such as a community foundation. The donor-advised fund vehicle itself is extremely flexible. Here’s why:

• Donor-advised funds are popular because they allow your client to make a tax-deductible transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Then, your client can recommend gifts to favorite charities from the fund when the time is right.
• A donor-advised fund at the Community Foundation is frequently a more effective choice than a donor-advised fund offered through a financial institution. That’s because at a community foundation, your client is part of a community of giving and has opportunities to collaborate with other donors who share similar interests. Plus, the Community Foundation is itself local and is deeply knowledgeable about the needs of our region and the nonprofits meeting those needs.
• The Community Foundation can work with you and your client to build a charitable giving plan that extends for multiple future generations. That is because the team at the Community Foundation supports your clients in strategic grant making, family philanthropy, and opportunities to learn about local issues and nonprofits making a difference.

Myth #2: Deciding whether to establish a donor-advised fund or a private foundation mostly depends on size
The size of a donor-advised fund, like the size of a private foundation, is unlimited. The United States’ largest private foundations are valued well into the billions of dollars. Information about private foundations, ironically, is not so private. The Internal Revenue Service provides public access to private foundations’ Form 990 tax returns. That is not the case for individual donor-advised funds.

Similarly, donor-advised funds are not subject to an upper limit. Although information on the asset size of individual donor-advised funds is not publicly available, anecdotal information indicates that some donor-advised funds' assets may total in the billions of dollars.

Indeed, a donor-advised fund of any size can be an effective alternative to a private foundation, thanks to fewer expenses to establish and maintain, maximum tax benefits (higher deductibility limitations and fair market valuation for contributing hard-to-value assets), no excise taxes, and confidentiality (including the ability to grant anonymously to charities).

The net-net here is that the decision of whether to establish a donor-advised fund or a private foundation–or both–is much less a function of size than it is other factors that are tied more closely to the objectives a client is trying to achieve.

Myth #3: Donor-advised funds and private foundations are mutually exclusive
Make sure you’re aware of the benefits of using both a donor-advised fund and a private foundation to accomplish clients’ charitable goals. For example:

• Donor-advised funds can help meet the need for anonymity in certain grants, which is typically difficult using a private foundation on its own.
• A donor-advised fund can receive a client’s gifts of highly-appreciated, nonmarketable assets such as closely-held stock and real estate, and benefit from favorable tax deduction rules not available for gifts to a private foundation.
• An integrated donor-advised fund and private foundation approach can help a client balance and diversify investment and distribution strategies to ensure that giving to important causes remains steady even in market downturns.

Some private foundations are even considering transferring their assets to a donor-advised fund at the Community Foundation to carry on the foundation’s mission. Terminating a private foundation and consolidating giving through a donor-advised fund is sometimes the best alternative for a client when the day-to-day management and administration of the private foundation has become more time-consuming than expected and is taking time and focus away from nonprofits, the community, and making grants.

Along these lines, some families find that the tax rules related to investments, distributions, and “self-dealing” have become harder to navigate and are perhaps even preventing the family from maximizing tax benefits of charitable giving. Finally, the administrative load of managing a private foundation sometimes becomes overwhelming, especially if the family members who handled these functions initially have retired, passed away, or simply become busy with other projects.

The bottom line here is that we encourage you to reach out to the team at the Community Foundation anytime you are evaluating how to structure a charitable giving plan to achieve both your client’s charitable goals and financial goals. Our team is here to help. In many cases, the Community Foundation’s tools and services are a great fit for your client’s needs. If not, we will point you in the right direction.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

As attorneys, CPAs, and financial advisors, you know very well that trust is at the foundation of your relationships with clients. Your clients are seeking a similar level of trust with the people and organizations that are helping carry out their philanthropic wishes.

Fortunately, trust in charities has shown an increase after a recent dip. According to the 2024 Edelman Trust Barometer and the Independent Sector's "Trust in Nonprofits and Philanthropy" report, trust in nonprofits rebounded by 5 points to 57% in 2024, following a four-year decline. This increase positions nonprofits as the most trusted sector compared to government, business, and media. Still, nonprofits face challenges and concerns about maintaining this trust, including general skepticism about institutions, as well as increasing expectations that charities demonstrate transparency and accountability.

As you work with your charitable clients, keep in mind that the Community Foundation can help bolster clients’ trust in their favorite charities. Here’s how:

Trustworthy information about particular charities
The Community Foundation is a valuable source for objective, timely information about specific charities and the impact of particular programs. By working with the Community Foundation, your clients can leverage a transparent and trustworthy avenue for learning about how best to make a difference for their favorite causes. 

Wide-ranging expertise about community needs
At its core, the Community Foundation is committed to achieving impact. This means that our team keeps a finger on the pulse of local needs, whether related to social services, health care, education, the environment, the arts, community development, or any other community priority. With a deep understanding about community needs, the Community Foundation team can be an excellent sounding board for your clients who want to learn which charities are addressing each need and how those charities are measuring results.

Broad set of tools for structuring charitable gifts
The Community Foundation can help establish a tax-efficient structure to achieve each client’s goals for community impact. Available vehicles include not only donor-advised funds, but also other types of funds such as designated funds to support specific charities and field-of-interest funds to address particular causes, as well as multi-generational funds to involve clients’ children and grandchildren. The Community Foundation offers your clients a flexible and effective way to manage charitable giving by simplifying their giving processes and maximizing potential tax benefits.

As always, we want to be your first call! Please reach out to the Community Foundation team anytime the topic of charitable giving comes up during a client conversation.

​The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

In an environment where immediate community needs are never-ending (and actually seem to be skyrocketing), it’s really hard to carve out energy and time in your fundraising plan to make room for planned giving. We understand! The team at the Community Foundation knows how crucial it is for our community’s charities to attract as many donor dollars as possible to meet 2025’s mounting demands.
Ignoring a planned giving plan altogether, though, would be a mistake. You’d be sacrificing the long-term longevity of your mission. Intellectually, nonprofit fundraising professionals understand this. It’s just that it seems so hard to do at the moment, in the midst of turbulent times and emotional drain. 

Keep your planned giving spirits high by considering the following:

• Donors’ planned gifts, such as bequests, are often significantly larger than annual donations. For instance, the average charitable bequest can range from $37,000 to $78,360, which is substantially higher than typical annual gifts. That’s because donors can make planned gifts from assets they might not be able to part with during their lifetime, such as naming a charity as beneficiary of a retirement plan.
• You may discover that engaging a donor in planned giving conversations actually enhances the donor’s annual giving and campaign giving. This is because you’re engaging a donor through yet another touchpoint, reinforcing that there are multiple ways to align values and beliefs with thoughtful gifts to support your mission and your endowment. Indeed, donors who arrange for a planned gift may increase their annual giving by up to 75% and beyond!
• Keep in mind that planned gifts are often unrestricted. This allows you to allocate the funds where they are most needed and, importantly, grow your endowment.
• Pursuing planned gifts may not be as time-consuming as you think, especially given the return on investment often yielded by a planned gift. For instance, according to at least one study, for every dollar spent on promoting bequests, charities can expect an average return of $56.83, significantly higher than other fundraising methods.

The key is to make it easy. Here’s how:

• Small tweaks to your marketing materials. Try to at least mention the opportunity for planned giving somewhere on each marketing asset. Make sure your website mentions your endowment fund at the Community Foundation. The same goes for printed materials, one-pagers, email newsletters, and annual appeal letters. Even though you mostly are asking for a current gift, don’t forget to mention that you’re always open to a discussion about endowment gifts through a bequest or beneficiary designation.
• Always mention it, even if briefly. Talk with your major gift donors about the importance of your endowment and operating reserves to the organization’s ability to weather the ups and downs of the market and community needs. Sometimes donors don’t think about the “business” side of nonprofits. Even if your meeting is about something else, you can at least plant seeds. 
• Offer real inspiration. If you can, find a current donor who is open to your organization sharing the story of the donor’s intentions to leave a planned gift to your endowment fund in addition to making regular annual gifts. Role models are powerful.

We look forward to working with you to help you grow your endowment! The Community Foundation is committed to your success. We believe in philanthropy’s ability to improve the quality of life in our region through outstanding nonprofit organizations delivering services to people who need it most. Thank you for all you do.

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

Repeat, repeat, repeat. You may feel like you are constantly talking with your donors about the benefits of giving appreciated stock. Your talk track may go something like this:

• “Before you reach for your checkbook to make a gift to our endowment fund at the Community Foundation, consider giving highly-appreciated stock.”
• “Appreciated stock is frequently a far more advantageous gift to charity than giving cash.”
• “When you make a gift of shares held for more than one year, you’ll typically be eligible for a charitable deduction at the shares’ fair market value on the date of the gift.”
• “Plus, our endowment fund is a charity and therefore capital gains tax won’t be triggered on the sale of the shares, leaving the full fair market value available to grow our endowment and pave the way for the future success of our mission.”
• “By contrast, if you’d sold the shares yourself and given the proceeds to our endowment fund, you’d owe capital gains tax. This can be a big hit if you’ve held the shares for many years and they’ve got a low basis.”
• “It’s easy to transfer stock to our endowment fund because we work hand-in-hand with the Community Foundation team.”

You say all of this so much that you’re sick of it, so surely your donors are sick of hearing it too, right? Wrong. Your donors don’t live and breathe charitable giving like those of us who work in the nonprofit sector day in and day out. So, not only is the subject matter sometimes challenging, but it’s also likely that donors are not paying attention most of the time. Indeed, a lot of donors are missing out on the benefits of giving stock instead of cash.

Building your endowment fund, like any type of fundraising, is a long game. You have to keep repeating key messages so that the point finally gets across, often when the timing is just right and the topic of tax planning or charitable giving happens to be on a donor’s mind.

The team at the Community Foundation is always happy to serve as a sounding board for key messages and strategies to build your endowment, one person and one gift at a time, over and over–and over–again. We’re honored to work with you!

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

The Community Foundation is honored to work with so many wonderful nonprofit organizations in our region that are improving quality of life every single day. We know that it’s important for you to grow endowment assets to create a permanent source of support for your mission.

You’ve likely made it a priority to provide ongoing education and information to your donors to help them understand how your endowment works and why it’s so important to the future of your organization. Occasionally, a donor may ask you about the difference between making a gift to support your endowment, or, in the alternative, establishing a separate endowment fund at the Community Foundation to support your organization.

Here’s a little background that may help you explain the differences to your donors. In either case, our team can help, so please do reach out.

Building your endowment fund. Many donors will want to support your endowment fund held at the Community Foundation. Your board of directors may from time to time elect to make transfers from your organization’s assets to the fund. Your organization’s endowment fund is sometimes referred to as “quasi-endowment” because your board of directors has some degree of flexibility to access the principal for certain stated purposes such as emergencies. Annual distributions to supplement your organization’s budget are often made from the endowment fund based on market value percentages.

Donor-designated endowment fund. Sometimes, a donor would like to support your organization by establishing a separate and permanent designated endowment at the Community Foundation, whether during lifetime or through a bequest. In that case, the board of directors and staff at the Community Foundation will oversee income payments to your organization and also ensure that the principal stays intact in perpetuity. In many cases, a donor will want to structure an endowment gift as a designated fund to benefit your organization while also leaning on the Community Foundation for support. The donor can name the fund whatever they’d like (e.g., the Smith Family Endowment Fund).

The Community Foundation team is experienced at managing the accounting, investment, and distribution aspects of all types of endowment funds. When you work with the Community Foundation, it’s convenient and rewarding to establish and grow your organization’s endowment, as well as offer donors the option to set up a separate named endowment fund. Both types of gifts help your mission stay strong and improve the quality of life for future generations.

​This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.

If you’ve ever considered wrapping charitable giving into a child’s birthday party, you are not alone! Lots of parents are encouraging their kids to have guests bring gifts to charity instead of presents, whether it's collecting books for a children's hospital, pet toys for an animal shelter, or non-perishable food for a local food bank. Guests can feel part of something special by bringing items that align with the birthday child's interests, and the party can include activities like making cards for the elderly or packaging donations together.

Even bigger than that, though, is the opportunity to educate your kids, starting at an early age, about charities and how every dollar can make a difference. Here are a few pointers:

Be intentional. Teaching children the value of charitable giving requires intentional strategies that blend financial education with empathy-building experiences. By including philanthropy as a regular part of your family routines and traditions, you can help your kids understand wealth as a tool for positive impact rather than just personal gain. Over time, you’ll see that this approach fosters both financial literacy and compassion for others.

It starts with money–and more. It’s often helpful to start the conversation by talking about money management and community needs, side by side. For example, you can explain how $100 might feed a family for a week, or how $1,000 could fund educational supplies for an entire classroom. You could even help your kids create a "giving budget” so they can practice ways to make their intentions visual and concrete. If you have established a donor-advised fund or other type of fund at the Community Foundation, log in to your account and show your kids how it works. 

Offer choices. Most kids don’t like to be told what to do (!), so it’s important to empower children by showing them how to research and pick causes that are aligned with their interests. The Community Foundation’s website is a great place to start. This is where kids can see the big picture of how charitable giving connects to our region’s quality of life, as well as learn about the Community Foundation’s priority initiatives and the nonprofits doing important work on the ground every day.

Get out and about. Children (and adults) learn by doing, so try to find opportunities for hands-on involvement. You and your kids could volunteer together at food banks, organize neighborhood donation drives, or create handmade items for those in need. The Community Foundation is always happy to offer resources that will help you and your family find volunteer opportunities that are a good fit for your areas of interest and the ages of your children.
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As always, the Community Foundation is happy to be your sounding board as you get your family involved in charitable giving. We are honored to work with all generations of community-minded people! The future of our region depends on it, and we are here to help.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.

​At some point during your adult life, you’ve likely realized that it would be wise to put in place a will, trust, and powers of attorney, as well as undertake at least a basic level of financial planning to stay on track with retirement and other wealth-related goals for yourself and for your family. Perhaps you’re also among the many people who have thoughtfully incorporated charitable giving strategies into a comprehensive financial and estate plan.
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If you’ve not yet wrapped charitable giving provisions into your will, trust, and financial plans, it’s never too late (or too early) to do so. The Community Foundation is happy to work with you and your legal, tax, and wealth advisors to set up charitable giving structures and processes that align with your intentions to support favorite charities and causes, as well as reinforce the tax and estate planning objectives you’ve set in motion.

Indeed, formalizing your charitable intentions can bring a deep sense of purpose. By incorporating charitable giving into your estate plan, your values and philanthropic commitments can continue beyond your lifetime. 

What’s more, lifetime charitable giving can be part of a strategic wealth management plan, allowing you to optimize your financial resources while supporting causes you care about. For example, charitable income tax deductions for your donations may reduce your taxable income and lower your annual tax bill. Plus, donating appreciated assets, such as publicly-traded stock held for more than one year, can help you avoid capital gains taxes. In addition, dollars flowing to charities following your death can help minimize the burden of estate taxes.

The Community Foundation team would be honored to help you develop a philanthropy plan, starting with lifetime giving and incorporating estate gifts as your legacy intentions take shape. As you consider whether the time might be right for you to formalize your charitable giving, here are three tips to consider - all of which the Community Foundation can help you achieve:

Give to what you know. Most people experience the greatest joy from giving to causes that are personally familiar. Personal experience makes it easier to understand how the charity is using your dollars. So, for example, if you’ve had experience with helping foster children, you are likely to understand how the organization is using your donation to support training for foster parents. Please ask the Community Foundation team for insights! It’s our job to keep up with the good work of charities that are meeting local needs.

Give where you are. Even with the increasing number of community challenges across the country and the globe, sometimes the greatest needs are right here at home. The Community Foundation team can help you identify opportunities to support local charities by gathering information about the overall need and how a particular charity addresses that need. When you give to local organizations, you are in a strong position to have confidence in your gift.

Give to the causes you love. Donations to charities that are aligned with your own passions make you feel the best and ultimately make the most difference because you’re likely to continue giving. The Community Foundation team is here to help bring your community dreams to life through the power of philanthropy. And that feels great!

If you’ve already established a donor-advised fund or other type of fund with the Community Foundation, or if you are considering getting started with the Community Foundation this year, we are here for you! The Community Foundation is honored to serve as your home for charitable giving. Our team looks forward to hearing from you.

The team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.