Functioning as a public charity, The Community Foundation (TCF) benefits from maximum tax deductions and other advantages not available to private foundations. This 501(c)(3) classification extends benefits to each donor of The Community Foundation, as well. When a TCF donor makes a gift to a fund, they receive an immediate tax deduction for the maximum allowable amount. Deductions benefit the donor and the community because thorough tax planning increases the amount of money that is available to address needs in our community.
When a donor has made the decision to give, they oftentimes consider establishing a private foundation. With a little investigative work, they find similarities between private foundations and funds opened through TCF:
- Both entities provide philanthropic community impact.
- Both entities can garner recognition in the community.
- Both entities provide family members with ways to be involved in philanthropy.
With further research, advantages offered by The Community Foundation quickly outweigh those of a private foundation. By opening a fund with TCF:
- Donors are able to make charitable gifts to funds in the same year that best suits tax planning needs.
- Donors can recommend grants to be made from the fund to charitable organizations over many years.
- Contributions are tax deductible, with few limitations. Many restrictions govern private foundations.
- TCF files an annual tax return for all Foundation funds. Private foundations incur the cost and burden of this headache each year.
- TCF relieves donors from rules and regulations regarding grant making and reporting that is required for private foundations.