Private Foundations
Private Foundations

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.

 

Explore what may be best for your charitable goals.

Want a more detailed assessment?

Want a more detailed assessment?

Download and complete our 10-question survey. You may wish to complete the survey with your family members and review the results with your financial, tax and legal advisors.

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.

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

Related resources

  • GUIDE

    Transferring assets

    Woman on laptop sipping coffee

    Review best practices for a smooth transfer of assets from a private foundation to a donor-advised fund.

  • PODCAST

    Choosing the right vehicle

    Giving with Impact podcast

    Learn how to approach your decision and find the vehicle best suited to your goals.

  • GUIDE

    Evaluating giving vehicles

    Older gentleman studying content on laptop

    Read vehicle summaries and complete a survey to identify the features most important to you.

Disclosure

A donor’s ability to claim itemized deductions is subject to a variety of limitations, depending on the donor’s specific tax situation. Donors should consult their tax advisors for more information.

(0322-2SSZ)