Helped Clients Recover Over $25 Billion. Since 1979.
Helped Clients Recover Over $25 Billion. Since 1979.
A donor-advised fund and a private foundation both let you set money aside now and give it to charities over time. They differ in who controls the money, what it costs to run, and what the law requires each year. The Schenk Law Firm helps donors choose, then sets up the foundation if that’s the better fit.
Comparing the Options
We review your giving goals and the assets you plan to give. Then we explain which vehicle fits the level of control you want.
Forming a Foundation
If a foundation is the right choice, we form it, draft its bylaws, and set up its board. Our starting a private foundation page has more.
Reviewing Fund Agreements
A donor-advised fund comes with the sponsor’s own agreement and policies. We review them with you before you sign, including who can advise on grants after you.
Coordinating Your Advisors
Deduction limits and tax planning differ between the two. We work with your tax attorney and CPA on those questions, or we find them for you.
Who controls the money?
In a donor-advised fund, the sponsoring charity owns the assets and you recommend grants, which the sponsor nearly always follows. In a private foundation, the foundation owns the assets and its board, which you can control, makes the decisions.
What does each one cost to run?
A donor-advised fund charges an annual fee and handles the paperwork for you. A foundation has formation costs, annual tax returns, state filings, and sometimes staff.
Can I give privately?
A donor-advised fund grant can usually go out without your name on it. A foundation’s annual return is public and lists its grants.
Do I have to give a set amount each year?
A private foundation must generally pay out about 5% of its investment assets each year. Federal law sets no yearly minimum for a donor-advised fund, although many sponsors have their own activity rules.
Can I pay family members or fund a pledge?
A donor-advised fund can’t pay you or your family, and it generally can’t fulfill a personal pledge. A foundation can pay reasonable compensation for real work, under strict rules that your tax counsel should review.
Experience
David Lizerbram has practiced business law for more than two decades. Benjamin Schenk founded and runs a commercial real estate investment and asset management firm.
A Neutral Comparison
We don’t manage money or sponsor funds, so our advice on which vehicle to use isn’t tied to either one.
One Coordinator for Your Advisors
We act as the coordinator for your plan. We work with your tax attorney, estate attorney, and CPA, or we find the right ones for you and coordinate their work with ours.
The Schenk Law Firm is based in North Park, San Diego. We advise donors throughout California on how to structure their giving.
Our full philanthropy and nonprofit practice.
Forming the foundation, its bylaws, and its board.
A flexible company for grants, investments, and advocacy.
Giving private company shares before a sale or public offering.
Entity Formation & Structuring
Choosing and forming the right company and setting up its ownership.
Bylaws, resolutions, and the records that keep an organization in good standing.
The choice between a foundation and a donor-advised fund affects how you give for years. We can talk through your goals and explain which one fits.
Contact us today to discuss your giving plans.
Request a ConsultationIt’s an account held by a public charity, called the sponsor. You give assets to the sponsor, take the deduction in that year, and recommend grants from the account over time.
No. Gifts to a donor-advised fund generally get the higher deduction limits that apply to public charities, while gifts to a private foundation have lower limits. Your tax counsel can apply the limits to your situation.
Yes. Some donors keep a foundation for major grants and a donor-advised fund for gifts they want to make privately.
Many large sponsors accept it after their own review of the shares. Our pre-IPO stock page covers the steps.