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The Youngstown Foundation

Youngstown Foundation VS. Private Foundations

The costs of establishing and running a private foundation can be overwhelming. Traditionally, assets in excess of $5 million are needed before the private foundation becomes a cost effective alternative.

As a community foundation, The Youngstown Foundation provides donors with all the functionality of a private foundation, but with significant economic and administrative advantages.

The advantages of working with The Youngstown Foundation are:

 


Establishing Funds

The Youngstown Foundation


Established with one signed document.

Private Foundation


Corporation or trust must be established; donor appoints board of trustees.

Tax Status

Automatically covered under The Youngstown Foundation's tax exempt status.

Must apply to IRS for private foundation tax exempt status which can take 6 months or longer.

Excise Taxes

None.

1-2% of Net Investment Income.

Cash Gifts

Deductible up to 50% of adjusted gross income.

Deductible up to 30% of adjusted gross income.

Publicly-Traded Securities

Fair market value up to 30% of adjusted gross income.

Fair market value up to 20% of adjusted gross income.

Real Estate/Closely-Held Securities

Fair market value up to 30% of adjusted gross income.

Deductible at cost basis.

Distribution Requirements

None.

A minimum of 5% of average asset value must be paid out each year.

Grantmaking Expertise

Have access to a team of The Youngstown Foundation experts who help identify and assess grantees. Extensive research, tools and tips on effective grantmaking and other resources available.

Trustees must arrange, administer and support grantmaking and monitoring structure.

Grantmaking

Donor recommends grants to qualified nonprofits.

Trustees control grantmaking.

Annual Tax Returns and Audit

The Youngstown Foundation files annual tax returns and provides an annual independent audit.

Trustees must file an annual tax return or hire staff to do so.

Investments

The Youngstown Foundation assets pooled into a larger portfolio enabling it to diversity investment, decrease management fees and ensure superior returns.

Trustees must handle.

General Administration

The Youngstown Foundation handles it all.

Trustees must handle.

Privacy vs. Publicity

Donors, their funds and grant awards can remain anonymous or can be promoted with The Youngstown Foundation's marketing/public relations network.

Required to filed detailed tax returns which are public records.

 

FriendsHelp for Private Foundations
It is easy to become overwhelmed with responsibilities of grantmaking, legal and administrative requirements, and fiduciary work when you have a Private Foundation. Take advantage of the benefits of working through The Youngstown Foundation and alleviate these challenges.
  • Contributions to The Youngstown Foundation:
    Private Foundation Trustees often have difficulty deciding on a sufficient number of grants in order to meet the annual 5% payout requirement.

    Contributions from a Private Foundation to The Youngstown Foundation are qualifying contributions that satisfy their minimum distribution requirements.

    Grants from Private Foundations to Community Foundations are not “taxable” expenditures and not subject to expenditure responsibility requirements. Therefore, a Private Foundation may establish a Donor Advised Fund and meet its distribution requirements while enjoying the advantages of being a part of The Youngstown Foundation.


Private Foundations Challenges:
Over time, Private Foundations develop the following concerns:
  • The original purpose of the foundation no longer has the urgency it once did.
  • As operating costs increase and government regulations multiply, financial factors make it difficult for the foundation to operate effectively.
  • The foundation’s board has lost members through resignation and death, and has found it difficult to attract new members.
  • Future generations will not continue to fulfill the founder’s charitable interests.
  • The founder desires that his/her children focus on the family’s philanthropy, not on the Foundation’s investments and administration.
  • Requirements and responsibilities of a Private Foundation become too time consuming.

Transfer Private Foundation Assets to The Youngstown Foundation:
  • Follow The Youngstown Foundation’s simple process to establish a Donor Advised Fund with the same distribution criteria as the Private Foundation.
  • Work with The Youngstown Foundation to appoint an advisory committee that will carry out the grant review processes, previously carried out by the Board of the Private Foundation.
  • Transfer the assets of the Private Foundation to the Donor Advised Fund. Once assets are transferred the fund becomes active and grants can be awarded.
  • At the end of the fiscal year of the Private Foundation, submit a final 990 to the IRS, informing them that the Private Foundation has ceased operation with zero assets.

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