Donor-advised funds and private foundations
Choosing the right vehicles for your charitable goals starts with defining your needs and what’s important to you. Use our quick assessment tool to explore whether a private foundation, donor-advised fund, or combination of both suits you best.
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Compare private foundations and donor-advised funds side by side
Private foundations and donor-advised funds have different levels of costs, offer different benefits for your giving, and can have significantly different tax considerations. Seeing how the two giving vehicles compare across these key factors may help you determine whether one vehicle or a combination of vehicles is best for your charitable goals.
Compare private foundations and donor-advised funds at a glance.
Also, download our Private Foundations and Donor-Advised Funds brochure.
Costs Costs Private Foundation Donor-Advised Fund Asset minimums Generally recommended for those with millions in charitable assets $0 Startup costs May be substantial—legal documentation, tax filings, etc. None Ongoing annual expenses Can be substantial Comparatively low Annual distribution requirements 5% distribution required annually At donor’s discretion
Benefits Benefits Private Foundation Donor-Advised Fund Administration Requires recordkeeping, asset management, review of grant solicitations, tax filings All managed by Schwab Charitable Privacy Public disclosure of contributions and grants in annual tax filings Individual account activity can be private Professional asset management options Yes Yes
Tax considerations Tax considerations Private Foundation Donor-Advised Fund Tax deduction limits for cash contributions 30% of adjusted gross income (AGI) 60% of AGI Tax deduction limits for contributions of long-term held publicly traded securities 20% of AGI, deductible at fair market value (FMV) 30% of AGI, deductible at FMV Tax deduction limits for contributions of long-term held real estate and private business interests
20% of AGI, deductible at the lesser of FMV or cost basis 30% of AGI, deductible at FMV Reporting Required annual state and federal tax returns None at the account level Taxes Excise taxes, up to 2% of annual investment income None
Review best practices for a smooth transfer of assets from a private foundation to a donor-advised fund.
PODCASTChoosing the right vehicle
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GUIDEEvaluating giving vehicles
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