Things to Consider
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Fund with the Santa Fe Community Foundation
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Create a Private or Corporate Foundation
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Organization
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Established 1981
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Must establish
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Tax Exempt
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501(c)(3) Status
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Must establish with IRS (6-8 months)
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Funds Required |
$25,000 minimum plus $250 set-up fee |
Experts recommend $10 million minimum |
Selection of Grantees |
Donor, family or his/her advisory committee recommends grantees |
Donor specifies grantees |
Tax Deductibility of Gifts |
a) Up to 30% of donor's Adjusted Gross Income (50% with cash donation) b) Excess may be carried over for five years
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Limited to 20% of donor's adjusted gross income (30% with cash donation) |
Federal Approvals, Restrictions, and Special Taxes |
a) Approved by IRS b) No payout requirement c) No federal excise tax |
a) Must receive IRS approval b) IRS requires 5% of assets to be paid out annually c) Fund is charged 2% federal excise tax on income unless strict requirements are met d) Greater incidence of IRS field audit |
Legal Documents for Creation of Foundation, Designation of funds and Grant Awards |
In place |
Must create |
Office |
In place |
May need to obtain |
Staffing |
In place |
May need to obtain |
Accounting |
In place |
Must obtain |
Tax Return (state and federal) |
Foundation reports |
Must prepare |
Public Report |
Report to public made annually if desired by donor |
Must prepare reports for the general public |
Knowledge of Potential Grantees |
Provided by Community Foundation |
Must develop |
Grant Evaluation Process to Ensure Donor's Intent Satisfied |
Community Foundation develops, if desired by donor |
Must develop |
Grants |
Not limited to 5% |
Grants must be at least 5% in order to avoid 2% tax rate |
Public Recognition for Donor |
Fund may be named or anonymous - SFCF publicizes grants made from funds, if desired |
Must provide or rely on grantee organization |
Director/Officer Liability Insurance |
In place |
Must obtain |
Investment of Assets |
Finance Committee oversees investment policies. Donor may recommend an investment manager for invested funds over $1 million.
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Must establish policies and select investments |
Organization Overhead |
1.5% fee on first $2 million; 1% from $2 - $5 million; .5% over $5 million |
Substantial costs; plus 2% federal excise tax on income |