Comparing Charitable Giving Options

What are the benefits of different charitable giving options?

    There are many ways to give to the causes you care about. In the past, you've likely given directly to nonprofits working on issues that matter to you. Now, you might be considering ways to elevate your charitable giving to ensure your approach is organized, tax-advantageous, and meaningful—for you, your family, your community, and the causes you love.

    In addition to giving cash gifts there are three charitable giving vehicles that many people consider in this situation:

    1. Establishing a charitable giving fund at a local community foundation, like the Sacramento Region Community Foundation
    2. Opening a private foundation, including a private family foundation
    3. Opening a commercial gift fund at a company like Fidelity or Schwab

    Of course, we believe establishing a charitable fund at a community foundation provides you with opportunities to strengthen your local community, network with like-minded people, and maximize the impact of your charitable giving in ways that private foundations and commercial gift funds cannot. Still, it's important that you consider the various charitable giving vehicles available to you, so as you explore the options, we hope the chart below can help you decide which is right for you:

      Charitable Fund at Community Foundation Private Foundation Commercial Gift Fund

    Cash Gifts to Nonprofits

    Support public charities in the U.S.

    Growth potential

    Income tax deduction

    Accept donation of non-cash items

    Ability to name successors

    No startup costs

     No annual taxes

    N/A

    No annual 5% payout required

    N/A

    Grant and admin services

    Anonymous granting option

    Fees re-invested in our community

    N/A

    Network with other philanthropists 

    Personalized service and recommendations

    As you can see, just as there are similarities between these charitable giving options, there are also important differences we encourage donors to keep in mind. Among them:‚Äč

    • Tax-Smart Giving: Making contributions to charitable funds at a community foundation or a commercial gift fund has many benefits when compared to giving to a private foundation. To start, the deduction limitations for gifts to a charitable fund are greater than those to private foundations. When gifting to a charitable fund the Sacramento Region Community Foundation, the income tax deduction as a percentage of adjusted gross income (AGI) for cash is 60% and for long-term appreciated assets is 30%. When giving to a private foundation, those deductions drop to 30% and 20%, respectively.

    Learn more about tax-smart giving

    Learn more about private foundations

    Surang Robinson moved the Malcolm W. Robinson Foundation to the Sacramento Region Community Foundation so she could focus on supporting her husband’s legacy, rather than dealing with the complexities of maintaining a private foundation.

    Read more

    • Grow Your Impact: When you make contributions to your charitable fund at the Sacramento Region Community Foundation, your gifts are invested to maximize return, strengthening your grantmaking impact. Our expert Investment Committee invests your funds based on strategies that increase the power of your charitable gift and create sustainable growth aligned with the granting time-horizon of your choosing — all tax-free, unlike at a private foundation, which carries a 1.39% tax on net investment income. 

    Learn more about our investments

    • Administrative Support Fees: As you consider which charitable sponsor is best for you, it’s important to note that all have one thing in common: administrative support fees. The most important detail in assessing a fee structure is understanding how fees are used. For example, fees generated from funds at commercial institutions become revenue that primarily benefit shareholders, not our community. Community foundations like ours, however, are committed to ensuring support fees are re-invested into the community by way of programmatic work guided by our strategic initiatives, capacity building for nonprofits, and place-based grantmaking, all of which multiplies the impact of your support.

    Learn more about our community leadership

    As you can see, the benefits of giving through a charitable fund at the Sacramento Region Community Foundation are plentiful. We offer a variety of charitable fund options to ensure your philanthropic giving is customized to your wishes, tax-smart, and impactful — from Donor Advised Funds (the most common option) to Scholarship Funds, and more.

    See our menu of charitable funds

    If you'd like to learn more about establishing a charitable fund at the Sacramento Region Community Foundation, please reach out to our team any time. We are happy to help you explore different giving options and discover the one that is right for you.

    CONTACT OUR TEAM TO SCHEDULE A MEETING


    The information provided here is general and educational in nature, and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific situation.

    Ready to Open a Charitable Fund?

    We are here to help you simplify your giving and strengthen your impact. We look forward to helping make your philanthropy powerful and rewarding, creating the lasting change you want to see — in this community and beyond.

    CONTACT our TEAM