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.

As a  community foundation , 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 an alternative of 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