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Donor Advised Fund at
Greater Worcester Community Foundation (GWCF) |
Commercially Affiliated
Charitable Fund (CACF) |
Private Foundation |
| Minimum Fund Size |
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| Governance |
- GWCF Board of Directors.
- Assets become property of GWCF.
- Donor may recommend grants from their Fund.
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- Trustees at CACF headquarters.
- Assets become property of CACF
- Donors may recommend grants from their Fund.
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- Independent corporation with its own Board of Trustees.
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| Administration |
- GWCF handles accounting, audit, due diligence, check writing, etc.
- 1% administrative fee on current market value.
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- Accounting, audit, due diligence, check writing, etc. at CACF.
- Fees vary. Range 0.5% - 2.5%; may include mark-up for financial advisor.
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- Independent, created and overseen by Trustees.
- All costs (payroll, audit, compliance, etc) are responsibility of Foundation.
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| Investment |
- GWCF Managed Fund or money market account option.
- Investment management fees charged to the Fund; average fee for GWCF Managed Fund: 0.65%.
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- Multiple investment options.
- Investment management fees charged to the Fund; cost varies depending on underlying mutual fund; range 0.3%-2.0%.
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- Investment vehicles selected and overseen by Board of Trustees.
- Investment management fees are responsibility of the Foundation.
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| Funding Limits and Federal Tax Consequences |
- Cash gifts: 50% of AGI.
- Capital gain property: 30% of AGI.
- All capital gain property including illiquid assets tax deductible at current value.
- 5-year carry-over available.
- No tax on Fund’s investment income.
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- Cash gifts: 50% of AGI.
- Capital gain property: 30% of AGI.
- All capital gain property deductible at current value.
- Some CACFs may accept illiquid assets.
- 5-year carry-over available.
- No tax on Fund’s investment income.
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- Cash gifts: 30% of AGI.
- Capital gain property: 20% of AGI.
- Publicly traded securities deductible at current value.
- Privately held stock and other assets deductible at basis.
- 5-year carry-over available.
- 2% excise tax on investment income.
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| Visibility |
- Fund name acknowledged in grant letters and listed in annual reports OR
- Optional anonymity
- No public disclosure of Fund’s activities
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- Fund name acknowledged in grant letters.
- No public disclosure of Fund’s activities.
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- Desire for degree of visibility determined by Board of Trustees.
- Issues own grant guidelines and annual reports.
- Detailed public disclosure annually by posting IRS 990PF on Internet.
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| Grant Making Process |
- Donor Advisor recommends grants; approval by GWCF required.
- GWCF provides due diligence review of grantees recommended by donor.
- Prescreened proposals in interest area(s) referred to donor advisors, if requested.
- Research on specific nonprofits upon request.
- Option to distribute grants from principal as well as income.
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- Donor/Advisor recommends grants; approval by CACF required.
- CACF provides due diligence review of grantees recommended by donor.
- Most provide option to distribute grants from principal as well as income.
- Many require annual minimum payout of 5% of assets.
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- Subject to screening, evaluation and approval by Board of Trustees.
- Restrictions on “self dealing.”
- Annual minimum payout 5% of assets.
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| Grant Making Capabilities and Restrictions |
- Broad flexibility, including national and international charities.
- GWCF has in-depth knowledge of Central Massachusetts needs and opportunities.
- Restrictions on grants to support lobbying.
- Ultimate purpose defined by donor or unrestricted.
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- Broad flexibility, including national and international charities.
- Restrictions on grants to support lobbying.
- Ultimate purpose defined by donor or unrestricted.
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- Determined by Board of Trustees.
- Restrictions on scholarship and research grants.
- Prohibition against grants to support lobbying.
- Purpose may be changed by future trustees.
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| Note: Policies and laws governing charitable gifts are subject to change. Examine carefully the policies that apply whenever you create a fund or foundation. |