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Donor Advised Fund vs. Private Foundation client info sheet

Private foundations are the right solution for some families, but many find the administrative requirements burdensome. Download this info sheet to help your clients understand the advantages of an OCF fund. 

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Launching and maintaining a private foundation entails considerable time and expense. Donor advised funds provide significant advantages, including:

  • Speed and simplicity. Funds can be set up immediately at no cost. View a comparison sheet.
  • Low minimum contribution. Your client can launch a fund with $25,000 or create a step-up fund with $5,000.
  • Administrative services. Funds are assessed an annual fee to offset the cost of administration. For more information on investments, fees, returns and policies, view the current fee schedule.
  • Investment Expertise.   OCF’s wise management of its investments optimize the purchasing power of its funds so they become a growing resource to support causes your clients care about.  A private foundation’s board chooses commercial investment managers that may vary in their expertise and quality over time.
  • Donor involvement. Donors, or others they designate, can recommend grants to qualified charitable organizations. A private foundation’s grantmaking is controlled by its board.
  • Service and relationship based support.  OCF can help define giving strategies that reflect donors’ interests, engage family members, offer peer learning opportunities and make connections with fellow donors.  OCF staff supports donors in their grantmaking by helping identify community needs and performing qualitative vetting of nonprofits.  Private foundations will need to hire employees or pay consultants to perform this work.
  • Tax benefits. Donor’s income tax deduction for contributions to private foundations are limited to a lower percentage of their AGI than contributions to a donor advised fund and contributions to a donor advised fund are less likely to be limited to the donor’s cost basis. Donor advised funds are also free from the standard excise tax that private foundations have to pay annually.
  • Privacy. An OCF fund can be named or anonymous. Donors can recommend that specific grants be made anonymously. Private foundations must disclose grants and assets.
  • Preserving donor intent. Donors can name organizations and areas of interest for their fund to support into perpetuity, creating a wonderful charitable legacy that will give for generations. OCF’s expertise in Oregon nonprofits allows us to honor your client’s intent when they are no longer able to advise on their fund, insuring that effective and impactful grants continue to be made in accordance with their wishes. A private foundation’s purpose may change with its future board and staff.