| 1. Typical Amount To Open |
$1,000,000 (Suggested) |
$5,000 |
$250,000 to $1,000,000 |
| 2. Annual Income Tax Deduction for Donors |
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|
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| (a) For Cash |
Deductible to the extent of 50% of
donor's "contribution base" (in general, adjusted
gross income). |
Deductible to the extent of 50% of
donor's "contribution base" (in general, adjusted
gross income). |
Deductible to the extent of 30% of
donor's "contribution base" (in general, adjusted
gross income). |
| (b) For Ordinary Income Property, Short-Term
Capital Gain Property and Other Special Categories |
Adjusted basis deductible to the extent
of 30% of donor's "contribution base." |
Adjusted basis deductible to the extent
of 30% of donor's "contribution base." |
Adjusted basis deductible to the extent
of 20% of donor's "contribution base." |
| (c) For Appreciated Securities and Other
Long-Term Capital Gain Property |
Fair market value deductible to the extent
of 30% of donor's "contribution base." |
Fair market value deductible to the extent
of 30% of donor's "contribution base." |
Fair market value, less 100% of gain, deductible
to the extent of 20% of donor's "contribution
base"; however, no reduction of gain for gifts of
shares of stock for which quotations are readily available
(referred to as "qualified appreciated stock"),
but there is a limit on number of such shares that can
be donated. |
| (d) Carryover of Deductions in Excess
of Percentage Limitations |
5 years |
5 years |
5 years |
| 3. Tax on Investment Income |
None, but income from interests in
partnerships operating active businesses and from direct
business operations, if unrelated to exempt purposes,
and debt- financed property is subject to unrelated business
income tax. |
None, but income from interests in
partnerships operating active businesses and from direct
business operations, if unrelated to exempt purposes,
and debt-financed property is subject to unrelated business
income tax (for which The Foundation is responsible if
the Donor-Advised Philanthropic Fund has insufficient
cash to pay tax due). |
2% excise tax on net investment income;
tax can be reduced to 1% if distributions are increased
to specified levels over prior years' charitable distributions;
tax on unrelated business income from partnerships or
debt financed property. |
| 4. Penalty Taxes |
|
|
|
| (a) On Organization |
Can be imposed only for disqualifying lobbying
expenditures, political expenditures and failure to properly
inform donors of deductible portion of "quid pro
quo" contributions. |
Can be imposed on the Foundation (not individual
donor-advised philanthropic fund) only for disqualifying
lobbying expenditures, political expenditures and failure
to properly inform donors of deductible portion of "quid
pro quo" contributions. |
Can be imposed on a private foundation for:
(i) failure to make minimum annual distributions; (ii)
"excess business holdings"; (iii) "jeopardizing
investments"; and (iv) "taxable expenditures."
Additional penalty taxes can be imposed (up to all of
the foundation's assets) for continuing violations. Penalty
taxes can be imposed on failure to properly inform donors
about deductible portion of "quid pro quo" contributions. |
| (b) On Management |
Can be imposed only on managers who knowingly,
willfully and without reasonable cause agree to the making
of "excess benefit" transactions, disqualifying
lobbying expenditures or political expenditures. |
Can be imposed only on managers who knowingly,
willfully and without reasonable cause agree to the making
of "excess benefit" transactions, disqualifying
lobbying expenditures or political expenditures. |
Can be imposed on foundation managers (trustees
and officers) who knowingly, willfully and without reasonable
cause participate in an act of "self-dealing"
or approve the making of a "jeopardy investment"
or a "taxable expenditure." |
| (c) On "Disqualified Persons" |
Can be imposed on trustees, officers, donor,
members of donor's family and other related parties who
engage in "excess benefit" transactions with
the supporting foundation. |
Can be imposed on the Foundation's officers,
donors of Donor-Advised Fund (if donor deemed to have
substantial influence over supporting charity), members
of donors' family and other related parties who engage
in "excess benefit" transactions with the Foundation. |
Can be imposed on "disqualified persons"
who participate in an act of "self-dealing." |
| 5. Operating Restrictions |
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|
|
| (a) Donor's Role in Decisions |
Donor cannot control Board. |
Donor recommends grants; the Foundation
approves. Grants that are not inconsistent with the general
purposes of the Foundation are considered. |
Donor can control Board. |
| (b) Limits on "Self-Dealing"
(Other than General IRC § 501(c)(3) and State Law
Limitations) |
Limit on "excess benefit" transactions
between the supporting foundation and trustees, officers,
donor, members of donor's family and other related parties |
Limit on "excess benefit" transactions
between the Foundation and donor, members of donor's family
and other related parties, if donor deemed to have "substantial
influence" over the Foundation. |
Because of potential penalty taxes, there
can be no business transactions between a private foundation
and its "disqualified persons"--trustees, officers,
donors, who are "substantial contributors,"
members of their families and other related entities. |
| (c) Payout Requirements |
None. Income can be accumulated for a reasonable
period for future charitable projects. |
The Foundation may choose to allow accumulation
of income for donor-advised funds individually or as a
whole. |
An amount equal to 5% of a private foundation's
investment assets must be distributed annually to avoid
penalty taxes. Accumulation for specific projects, with
IRS approval, permitted under certain circumstances. |
| (d) Limits on "Business Holdings" |
No limit on amount or types of interests
in business entities that can be held, aside from limits
under State law rules governing investments by a charitable
entity. |
Same as Supporting Foundation, except the
Foundation may impose limits. |
Because of potential penalty taxes, divestiture
required if the combined holdings of a private foundation
and its "disqualified persons" are more than
20% of the voting stock of a corporation or 20% of the
profits interest of a partnership; amounts held by "disqualified
persons" reduce permitted holdings of the foundation;
no holdings in unincorporated business permitted. |
| (e) Limits on Investments (Other than
General IRC § 501(c)(3) Limitations and State Law
Limitations) |
No limits. |
Same as Supporting Foundation, except the
Foundation may impose limits. |
Because of potential penalty taxes, jeopardizing
investments must be avoided, i.e., federal standard applied,
requiring exercise of ordinary business care and prudence
in making investments. |
| (f) Limits on Grants and Activities |
Grants and activities must be in furtherance
of exempt purposes; non-charitable activities permitted
if "insubstantial." |
Grants and activities must be in furtherance
of exempt purposes of the Foundation. |
Grants and activities must be in furtherance
of exempt purposes. Because of potential penalty taxes,
improper expenditures ("taxable expenditures")
must be avoided; these include grants to individuals or
to other private foundations or non-charitable entities,
unless special procedures are followed, and non-charitable
expenditures, including unreasonable administrative expenses. |
| 6. Reports to IRS |
Annual report on Form 990 (and Form 1023,
exemption application) available for public inspection;
no notice of availability required to be published; copies
required to be furnished on request; however, donors do
not have to be disclosed. Anonymous giving is possible. |
Same as Supporting Foundation; but all donations
to, grants from, and investments of Donor-Advised Fund
grouped with those of the Foundation. |
Annual report on Form 990-PF; more detailed
reporting and allocation of expenditures required; Form
990-PF required to be filed with State Attorney General;
donors not protected against public disclosure (i.e.,
anonymous giving not possible) |
| 7. Succession at Death |
Voting members (or Board, if no voting members)
name successors. |
The Jewish Community Foundation allows one
successor generation. |
Voting members (or Board if no voting members)
name successors. |
