Side by Side: Private Foundations and Donor Advised Funds

A Donor Advised Fund (DAF) can be used in addition to a Private Foundation. Leveraging a DAF as a complementary vehicle may help a Private Foundation achieve its mission more effectively and efficiently.

• Maximizing tax efficiency
  A grant to a DAF is a “qualifying distribution” that counts toward the 5% annual payout required of a Private Foundation. A DAF is exempt from annual 5% minimum distribution requirements and investment excise tax.
• Flexibility
  One or more trustees of the Private Foundation can be named as the fund advisor(s) of the DAF. The DAF assets grow tax-free as the fund advisor(s) recommend grants to their chosen charity or charities over time. The fund advisor(s) can recommend investment strategy.
• Multi-generational
  Is it time to consider passing the torch to your clients’ children or grandchildren? A DAF is an excellent tool to help them get their feet wet in the philanthropic world.
• Ability to give anonymously
  Public reporting requirements for Private Foundations make it impossible to give anonymously. A DAF offers the option to customize each charitable grant, including the ability to give anonymously.

Community Endowment Fund

Is your client searching for a meaningful way to satisfy the 5% annual payout required of their Private Foundation? Then suggest a contribution to STLCF’s unrestricted endowed fund, the Community Endowment Fund (CEF). The CEF enables the expert staff at STLCF to address our region’s emerging, most vital, and ever-changing needs in perpetuity. The CEF accept gifts of any size — no amount is too small or too large. “Highest and best use” of philanthropic assets is an objective met when your client donates to the CEF. Grants from the CEF are applied to our region’s most pressing needs at the moment of disbursement. No matter how circumstances and organizations may change in the future, the CEF will never become obsolete or misappropriated — its relevant purpose will remain intact forever. Learn more…

Interested in learning more? Contact Katie Knapp at kknapp@stlgives.org.