How does a private foundation differ from a donor-advised fund?
A donor-advised fund is an Internal Revenue Code Section 501(c)(3) public charity that allows you to make an irrevocable contribution and then recommend grants to qualified non-profit organizations. As a donor you can make recommendations concerning investment allocation and grant distributions however, ultimate decision-making authority resides with the foundation’s board. A private foundation is a private non-profit organization established and managed by you and your board. In practice, the two giving vehicles can accomplish many of the same goals. The most significant differences are that donor-advised funds involve less administration at start-up and on an ongoing basis, while private foundations provide ongoing control by you and your designee and can have more flexibility in terms of their operational restrictions. In addition, the tax benefits for a private foundation and donor-advised fund vary. For more information on selecting an appropriate giving vehicle, see Comparing Giv
