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Community Foundation vs. Private Foundation

Community foundations give donors benefits not available through private foundations.

The chart below briefly summarizes the key differences between community foundations and private foundations.

Charitable Fund at Community Foundation of Central Illinois
Private Foundation

Organizational Structure

Donors establish individually named funds within the corporate structure of CFCI

Donor must establish a separate nonprofit corporation and apply for federal tax exemption with articles of incorporation and bylaws

Donors can guide grant making activities of their funds

Donor operates own grant program, including soliciting, evaluating, awarding and tracking all grants.

CFCI files one federal and one state tax report for all of its funds

Donor is responsible for investments, accounting, and state and federal reporting

Tax Deductions for Donors

Donor receives 100% fair market value charitable deduction for gifts of publicly traded stock, closely-held stock, real estate, and other long-term capital gain property

Donor currently receives a fair market value charitable deduction only for gifts of publicly traded stock. The deduction for gifts of other appreciated property, such as real estate or closely-held stock, is limited to the donor cost basis

Gifts of cash are deductible up to 50% of the donor’s adjusted gross income with a five-year carryover for any excess

Gifts of cash are deductible up to 30% of the donor’s adjusted gross income with a five-year carryover for any excess

The fair market value of gifts for appreciated securities or real estate are deductible up to 30% of the donor’s adjusted gross income with a five-year carryover for any excess

Gifts of appreciated property are deductible up to 20% of the donor’s adjusted gross income with a five-year carryover for any excess

Federal Tax

CFCI is exempt from most federal and state taxes

Subject to federal tax of up to 2% annually on invested income

Pay-out Requirement

No IRS requirement that any amount be paid out annually in grants

IRS requires an annual grant pay-out of 5% of assets

 

The professional staff at the Community Foundation of Central Illinois’ is ready to work with you to achieve your goals.

For more information, please contact the Foundation at 309-674-8730 or send us an email.

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