How does a private foundation compare to a Donor Advised Fund?
The difference is mainly in control and flexibility. With a private foundation, the donor retains control over charitable donations and other disbursements. Foundations can hire staff, reimburse expenses, set up structured giving programs such as scholarships, and make grants directly to individuals in need. In addition, donors can contribute a much wider variety of assets to fund the foundation, such as “144” restricted stock, and the founder retains control over how the assets are invested. Contributors to a donor advised fund make irrevocable contributions to a nonprofit organization that administers the fund and makes decisions regarding fund investments. Contributors may recommend eligible charities as recipients for grants, but the fund’s governing body is free to accept or reject any recommendation.
Related Questions
- What is the difference between setting up a private foundation and creating a donor advised fund at Shasta Regional Community Foundation?
- What is the difference between setting up a private foundation and creating a donor advised fund at Kern Community Foundation?
- Why establish a donor advised fund instead of a private foundation?
