Some Christian givers have established private foundations. A private foundation can be a good vehicle for individuals to conduct their giving. However, Christian givers with private foundations may consider switching to a Christian donor-advised fund for 5 key reasons:
1. Anonymity. As you now, the private foundation is required to file an annual tax return, a 990. That tax return is publicly available on a number of websites. In short, there is a complete lack of anonymity for the public foundation, not only in the assets that it holds, but in the people associated with the foundation and the grants that it makes.
2. Security. Because the private foundation information is publicly available, it poses security risks for those traveling abroad. The State Department notified one of our donors who also used a private foundation and encouraged him to shut down his private foundation. The size of the foundation and the lack of anonymity made the donor a candidate for kidnapping and ransom.
3. Harrassment. Because of the fact that grants are published, some private foundations have been subject to picketing, letters, etc. If a foundation funds a controversial activity, then activists have opposed those foundations funding pro-family, pro-Christian agendas. In short, activist groups are scanning private foundation tax returns for such activity.
4. Restrictions on Gifting. There continues to be a concerted effort to begin to limit grants from private foundations. The Greenlining Institute is actively campaigning to limit private foundation giving. They want to require that at least 50% of private foundation grants go to politically correct organizations, i.e., anti-family, anti-marriage, etc.
5. Growth/Networking of the Christian Community. One of the key benefits of being involved with a Christian community foundation is the fact that they have become great networking organizations. They hold events where other Christians can gather, meet each other, do business together, and even give together. It is the activity of the church being the church. Certainly, the stand-alone private foundation does not afford that opportunity.
For more on private foundation conversion to a donor-advised fund, call 913-310-0279.
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Published October 20, 2010
Topics: Giving Strategies