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Foundation Source / Get Started / New Foundations

  1. Foundation Creation
  2. Benefits of a
    Foundation
  3. Investment
    Options
  4. Giving
    Options
  5. Tax
    Benefits
  • Starting a private foundation has never been easier or faster.

    Foundation Source will have your new foundation up and running in less than a week. Three steps, and we take care of the rest.

    1. Choose a name for your private foundation. You can name it after the family or something entirely different that inspires you.
    2. Complete the brief set-up questionnaire. This tells us who will fund the foundation and where the foundation's investment account will reside.
    3. Fund your foundation and start giving. Minimum initial funding: $250,000.
  • Control:

    Unlike a donor-advised fund, a private foundation is an independent legal entity over which you retain complete control. You have final say over how the foundation is governed, and how foundation assets are invested and spent.

    Flexibility:

    In addition to a wide range of options for philanthropic spending, foundation assets can also be used for administrative expenses, some of which count toward the annual 5% minimum distribution requirement. These include reimbursing expenses for foundation related travel, leasing office space, and paying family members who serve as directors or foundation staff.

    Family Engagement:

    Private foundations help unite families – who may be separated by distance, age, and interests – as they work together toward common philanthropic goals. The foundation can also serve as a training ground to teach values and skills to younger generations, such as leadership, teamwork, investment management, and how to read financial statements.

    Legacy:

    How will you be remembered 100 years from now? A private foundations can exist in perpetuity, attaching the family name to a legacy of philanthropy that endures through the generations.

  • Private foundations can be funded with, and continue to hold, a wide variety of assets.

    Other types of giving vehicles typically liquidate assets other than publicly traded securities shortly after they are donated.

    Assets that can be held in a private foundation include:

    • Cash and publicly traded securities
    • Alternative assets, including private equity
    • Real estate
    • Tangible assets (art, jewelry, collectibles)
    • Intangible personal property (copyrights, patents, royalties)
    • Life insurance and annuities

    And if you have a Charitable Remainder Trust, you can name your foundation as the beneficiary.

    Foundation Source does not manage assets. We work closely with the trusted financial advisor you designate, and share our expertise on special considerations that affect assets within a private foundation.

  • Private foundations have broad latitude to pursue any activities as long as they are charitable.

    In addition to supporting public charities and other types of nonprofit organizations, a foundation can:

    • Make grants to individuals for disaster relief and economic hardship
    • Provide loans that are repaid to the foundation
    • Set up scholarship and award programs, and choose the recipients
    • Grant to international organizations
    • Provide funds to for-profit companies, when it’s for a charitable purpose
    • Run its own charitable programs, such as mitten and coat drives

    Our staff of private foundation experts will guide you every step, so you can easily take advantage of every IRS-sanctioned option to accomplish your charitable goals.

  • Funding a private foundation can yield significant tax management opportunities that preserve more of your wealth over time for accomplishing your own goals.

    You can:

    • Get an immediate income tax deduction for foundation funding, yet make charitable gifts in the future
    • Grow foundation assets income-tax-free
    • Avoid estate and gift taxes on assets transferred to your foundation
    • Avoid capital gains taxes on appreciated assets that are transferred to your foundation

    Typically, donations to a private foundation are tax deductible up to 30% of adjusted gross income (AGI) for cash, and up to 20% of AGI for appreciated securities, with a five-year carry forward to use any remaining portion of that deduction.

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