Foundation Source Survey Gauges Options on Charitable Vehicle Rules

Date:

Categories: Press Releases

Respondents favor more level playing field for private foundations and donor-advised funds

FAIRFIELD, Conn., Dec. 4, 2018 – Foundation Source today reports the findings of its recent survey regarding opinions of the regulations and tax incentives for two of the most popular charitable vehicles: private foundations and donor-advised funds. Currently, private foundations are subject to stricter regulations, and donor-advised funds receive more favorable tax treatment. So, how do private foundation donors, donor-advised fund owners, and other high-net-worth individuals who are considering these two charitable vehicles view these discrepancies in regulations and tax incentives? Overwhelmingly, survey respondents favored a more level regulatory playing field.

“The differences in regulatory and tax treatment between these two charitable vehicles has been the topic of considerable media interest,” said Page Snow, chief philanthropic officer of Foundation Source. “Until now, however, the opinions of individuals who have first-hand experience donating via these vehicles, or are actively considering establishing one, have been absent from the conversation. Their answers about what they consider appropriate can provide helpful insight to inform this discussion.”

Here are some of the survey’s most significant findings:

  • The vast majority of all respondents (86%) said that donations to private foundations and donor-advised funds should enjoy the same tax treatment.
  • Sixty-five percent (65%) of all respondents deemed the 5% Minimum Distribution Requirement for private foundations “just right,” and 57% said donor-advised funds should be subject to a similar requirement.
  • Seventy-two percent (72%) of all respondents approve of the fact that private foundations are required to publicly disclose the names of their major contributors and grant recipients. Forty-seven percent (47%) of all respondents said the same regulation should also apply to donor-advised funds.
  • Sixty-six percent (66%) of all respondents support the current rule that permits donating funds from a private foundation to a donor-advised fund. Conversely, although presently disallowed, 46% said they should be able to donate funds from a donor-advised fund to a private foundation.

“Although donor-advised funds and private foundations allow for different degrees of philanthropic flexibility and control, many individuals and advisors see them as almost interchangeable,” said Ms. Snow. “Both vehicles facilitate a planned approach to giving, enable charitable funds to grow in a tax-advantaged environment, and provide for a same-year income tax deduction for contributions. Perhaps these similarities explain why survey respondents favored comparable regulation and tax treatment.”

Survey Methodology

Foundation Source conducted its survey online. Of the 205 U.S.-based respondents,  151 individuals had either a private foundation, a donor-advised fund, or both, and 54 individuals had neither charitable vehicle.

The full report of this survey may be downloaded here.

About Foundation Source (www.foundationsource.com)

Foundation Source is the nation’s largest provider of comprehensive support services for private foundations. Our complete outsourced solution includes foundation creation (as needed), administrative support, active compliance monitoring, philanthropic advisory, tax and legal expertise, and online foundation management tools.

Now in our second decade, Foundation Source provides its services to nearly 1,500 family, corporate, and professionally staffed foundations, of all sizes, nationwide. We work in partnership with wealth management firms, law firms, accounting firms, and family offices as well as directly with individuals and families. Foundation Source is headquartered in Fairfield, Connecticut.