Alternative to Private Foundation
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.
The Youngstown Foundation provides donors with all the functionality of a private foundation, but with significant economic and administrative advantages. This chart compares establishing a fund at the Youngstown Foundation to creating a private foundation.
| The Youngstown Foundation | Private Foundation | |
| Establishing the Fund | Fund is established with a single signed document and minimum contribution of $10,000 | Nonprofit corporation or trust must be established and minimum contribution typically $1 Million |
| IRS Charitable Status | Automatically covered under existing tax-exempt status | Lengthy IRS application process for private foundation tax-exempt status |
| Grantmaking | Donor recommends grants to qualified nonprofits or discretionary fund. No annual minimum distribution | Trustees control investments and grantmaking with a minimum 5% payout |
| Tax Status | Public charity | Private charity |
| Start-up Costs | No cost | Legal, accounting and filing fees |
| Excise Taxes | None | 1.39% of net investment income |
| Tax Treatment: Cash Gifts | Deductible up to 60% of adjusted gross income | Deductible up to 30% adjusted gross income |
| Tax Treatment: Appreciated Publicly-Traded Stock, Held > 1 Year | Full market value deductible up to 30% of adjusted gross income | Full market value deductible up to 20% of adjusted gross income |
| Annual Tax Returns and Audit | The Youngstown Foundation files annual tax returns and provides an annual independent audit | Trustees must file Annual 990 tax return |
| Investments | Professionally managed assets in a diversified investment portfolio, low management fees to ensure superior returns | Trustees are responsible for all investment activities |
| Fiduciary Responsibility | The Youngstown Foundation fulfills all responsibilities | The private foundation board has full fiduciary responsibility |
| Administration | The foundation manages all accounting, audit, due diligence, check writing, reporting | Personnel required for operations, tax filings, and investment management |
| Privacy/Publicity | Flexible donor preferences including anonymity or public recognition | Full public disclosure of grants and balance |