Is Converting Your Foundation to a Donor-Advised Fund Right For You?
This survey can help you determine if a donor-advised fund account makes sense for you. Whether you want to convert your private foundation to a donor-advised fund account or are considering one as a complement to your foundation, Schwab Charitable can help.
Relinquishing ownership of an asset to a charitable entity is the trigger event for claiming a charitable tax deduction. Control or donor influence beyond that point varies depending on the charitable vehicle chosen.
The board of directors of a private foundation legally controls all administration, investment management and grantmaking activities. They can directly hire staff, charge appropriate expenses to the foundation and grant to a wide variety of causes. The donor(s) who establish the foundation may select the board of directors.
With individual donor-advised fund accounts, donors retain the right to recommend how the charitable assets are invested and granted to public charities of their choosing. Donors' recommendations are generally honored except for explicit regulatory or legal reasons. Typically these are limited to situations in which the recommended charity has lost its tax-exempt status or the grant would result in some personal benefit to the donor. This due diligence performed by the donor-advised fund sponsor is protective of the donor and ensures appropriate use of charitable assets.
1. A private foundation is likely the more appropriate charitable vehicle for you because it offers more legal control.