| PRIVATE FOUNDATION | COMMUNITY FOUNDATION | |
| Private foundations require the donor to create a new organization, apply for tax-exempt status, and pay taxes, legal and accounting expenses. | vs. | A fund at the Community Foundation is easy and inexpensive to establish. |
| Deduct up to 30% of Adjusted Gross Income (AGI) for cash gifts. | vs. | Deduct up to 50% of Adjusted Gross Income (AGI) for cash gifts. |
| Deduct market value of capital gain property up to 20% of AGI for gifts of appreciated property. | vs. | Deduct market value of capital gain property up to 30% of AGI for gifts of appreciated property. |
| Pay 2% excise tax on net investment income, unless certain payout requirements are met. If requirements are met, then pay a 1% excise tax. | vs. | No excise tax. |
| Pay at least 5% of net investment asset value annually for charitable purposes, whether or not the Foundation earns such an amount. | vs. | No payout requirement. |
| Must avoid a long list of "self dealing" transactions. | vs. | Exempt from self dealing regulations. |
| Must file IRS Form 990PF annually. The form is a report of investments, donors, grants, trustees, fees, staff salaries and other payouts. | vs. | Community Foundation files or annual tax return (Form 990) for all funds as a whole while maintaining anonymity for individual donors. |
| Must hire staff for grant administration. | vs. | Full-time professional staff is available to assist donors with their grantmaking. |
| Typically less efficient due to smaller asset base. | vs. | Typically more efficient because staff and administrative costs are spread across a larger asset base. |
| Can only make grants to 501(c)3 organizations and government entities. | vs. | Can make grants for any charitable purpose. |
