Jilian Mincer highlights the trend of givers transferring their private foundations to donor-advised funds in a recent Wall Street Journal article.
In the article, Mincer highlights the fact that moving one’s foundation assets into a fund causes substantial tax savings (meaning more to give), cost benefits, additional privacy, and higher levels of flexibility. Donors can be more focused on where and how they give charitably, rather than spending time on administrative duties.
Ms. Mincer also highlights the potential drawbacks why some might not like the idea of abandoning the private foundation model – primarily lack of independence and total control. She cites, for example, the legal requirement that all grants from funds be directly made to charitably exempt organizations, as opposed to individuals and groups that aren’t officially recognized as such by the IRS. This is an accurate point. At Servant, however, we’ve partnered with benevolence ministries such as Helping Hands Ministries to channel tax-deductible gifts to qualified individuals. We’ve also seen that givers prefer the freedom from the administrative details of the private foundation. In the example cited in the article, a donor that had typically spent several weeks each year on foundation maintenance was able to reduce that by 75%. And all of that time can be focused on the actual giving of grants.
You can read the entire article here.