Schwab Charitable

Private Foundation Conversion

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.

Costs (Question 4 of 10)
How concerned are you about the costs incurred in managing your philanthropy?

I am not at all concerned about the costs, and/or feel that they are immaterial relative to what I am able to grant to charity.

I am not too concerned about the costs, and/or feel that they are reasonable relative to what I am able to grant to charity.

Don't Know/No Opinion

I am somewhat concerned about the costs, and would like to reduce them to be able to grant more to charity.

I am very concerned about the costs, and would like to minimize expenses to be able to grant more to charity.

considerations

The costs associated with philanthropy can vary considerably, depending on the vehicle selected.

Private Foundations:
Private foundations tend to be more expensive to establish and run than a donor-advised fund account:

  • Start-up costs of generally $10,000-$25,0001 to create the foundation (typically requires the services of a qualified attorney or accountant).
  • Annual operating costs for most private foundations range from 4.87% of assets (for foundations with <$1 million) to 0.28% of assets (for foundations with >$10 million).2 These costs include grant processing and administration, preparation of the annual 990-PF filing, legal and consulting costs and staff (if so desired).
  • Excise taxes of 1-2% on net investment income.
  • Investment management fees vary depending on the foundation's investment choices and use of outside investment manager(s).
Donor-Advised Funds:
Donor-advised fund accounts are, in general, significantly less expensive than private foundations because of the aggregation of administration and the use of technology to improve efficiency:

  • No start-up costs.
  • Annual administrative costs at most donor-advised funds range from 0.60% of assets (for accounts under $500,000) to 0.19% or less of assets (for accounts over $10 million).
  • No excise taxes on net investment income.
  • As with private foundations, investment management fees vary depending on the types of investments and use of outside investment manager(s).
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Schwab Charitable does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.

Schwab Charitable is the name used for the combined programs and services of Schwab Charitable Fund, an independent nonprofit organization. Schwab Charitable Fund has entered into service agreements with certain affiliates of The Charles Schwab Corporation.

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