Establishing a charitable fund at The Alaska Community Foundation offers many unique advantages over creating a private foundation. Here are just a few for you to consider:
“The community foundation enables people to leave a legacy that will forever benefit their community. ACF fund advisors are local residents who are very much involved in their communities. They see the needs and respond with funding solutions in a way that most benefits their homes the most.”
No tax is imposed on the investment income of a charitable fund because it is a component of a public charity. Private foundations pay up to 2% federal excise tax on their investment income and net realized capital gain.
There are fewer investment restrictions on a community foundation’s funds.
A charitable fund is easy and inexpensive to establish. Unlike a private foundation which requires you to create a new non-profit organization, apply for tax-exempt status, pay filing fees and incur legal and accounting expenses, The Alaska Community Foundation (ACF) takes care of everything.
There are no minimum distribution requirements for a charitable fund at a community foundation. A private foundation must annually distribute at least 5% of its net investment assets, regardless of whether the amount is actually earned.
You can choose to remain anonymous.
A private foundation must make available to the public the name and address of any substantial contributor.
A gift of cash to a charitable fund allows a deduction of up to 50% of a donor’s Adjusted Gross Income (AGI). A gift of cash to a private foundation only allows you to only deduct up to 30% of AGI.
There are fewer IRS reporting requirements on community foundation grants and funds. Requirements that do exist are handled by the foundation’s staff at no extra charge to individual donors.
By creating a charitable fund, you may deduct gifts of closely held long-term appreciated stock at its fair market value, up to 30% of AGI. If the same gift is given to a private foundation, deductions may be limited to its cost basis up to 20% of AGI.