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Select an option to learn more about how we can help.

Individual

Private Foundation

Wealth Manager

Family

Nonprofit

Attorney

Company

Private Foundation or Community Foundation?

If your client is considering establishing a private foundation, check out the simpler, less expensive alternatives first.

You'll find Akron Community Foundation offers benefits that private foundations can't offer, including a more favorable tax status and no minimum annual payout requirement. We minimize the paperwork and administrative hassles, allowing your client to focus on the joy of giving and involving family members for generations to come. 

See how your client can accomplish this with a donor-advised fund. 

 

STARTING DONOR-ADVISED FUND AT ACF

STARTING A PRIVATE FOUNDATION

GIVING DIRECTLY TO FAVORITE CHARITY

Set-up time 

As little as 1 day

6-9 months

Immediate

Start-up costs (e.g. legal and accounting fees) 

None

Typical costs of creating a corporation (legal, accounting, etc.)

None

Annual costs

Total fees less than 2%

Extensive administrative, legal and investment costs

None

Initial gift minimum

$5,000

$5-10 million recommended

None

Annual tax filings and returns

Not required (part of ACF annual reporting)

Must be filed by private foundation staff

Charity conducts

Record keeping / accounting

Provided by ACF staff

All services arranged by private foundation staff

No

Administrative support

ACF professional staff

None, must hire private foundation staff

Charity's staff

Payout required

None

Yes - 5% annually

None

Annual taxes

None

Yes - up to 2%

None

Governance and oversight

ACF board of directors

Private foundation board

Charity's board

Grantmaking strategy assistance; information on community issues

Yes, if donor desires

None, must hire private foundation staff

No

Confidentiality

Yes, donor can choose anonymity both in giving and grantmaking

No

No

Donor control of distributions

ACF carries out donor's wishes via grant recommendations, subject to ACF board approval

Subject to private foundation's board

Donor can request restrictions on gift, but charity has final say  

Ability to give to multiple nonprofits and causes

 Yes

Yes

No

Investments

Active board oversight, record of long-term growth by top-tier investment managers

Private foundation staff must oversee, management could be costly, depending on assets

Charity not required to invest gift for growth

Download our donor-advised fund comparison chart. 

Converting a private foundation

Section 507 of the Internal Revenue Code permits termination of a private foundation in either trust or corporate form and distribution of its assets to a public charity.To terminate, a private foundation must meet two primary requirements: 

  • It must distribute all of its net assets to one or more tax-exempt organizations. 
  • Each organization must have been in existence for a continuous period of at least five years preceding the distribution. 

Akron Community Foundation qualifies under both of these requirements. And, as part of the community foundation, a private foundation's assets can continue with the organization’s original charitable purpose as a permanent named fund.

There is no excise tax, payout requirement or need for a separate audit as a fund of the community foundation.

We also provide services for private foundations

Many times, private foundations struggle at year’s end to make their 5 percent mandatory grant payout. You can help them meet the requirement in a single, immediate transaction through a grant from their foundation to establish a donor-advised fund at Akron Community Foundation. Then, the private foundation’s board can take time to deliberate on their grant-making decisions. A minimum of $5,000 establishes a donor-advised fund, and your client gains all the charitable benefits a public charity can offer.

For more information about our services for private foundations, contact Margaret Medzie, vice president of development and donor engagement, or Laura Fink, director of development.