Community foundations give donors benefits not available through private foundations. The chart below briefly summarizes the key differences between community foundations (using examples of two different fund types) and private foundations.

The Cleveland Foundation vs. Private Foundations

  Private Foundation Donor-Advised Fund of the Cleveland Foundation Supporting Organization of the Cleveland Foundation
Legal Identity Separate nonprofit entity [Donor’s Choice of Name] Fund of the Cleveland Foundation [Donor’s Choice of Name] Fund of the Cleveland Foundation (separate nonprofit entity affiliated with the Cleveland Foundation)
Tax Status Private foundation Public charity Public charity
Taxation of Investment Income 2% annually None None
Payout Requirement Grants must equal 5% of corpus annually None None
Deductibility of Gifts Deductibility: 20% AGI* for appreciated property 30% AGI* for cash Deductibility: 30% AGI* for appreciated property 50% AGI* for cash Deductibility: 30% AGI* for appreciated property 50% AGI* for cash
Administration Detailed annual filing with IRS All record-keeping and accounting carried out by the Cleveland Foundation All record-keeping and accounting carried out by the Cleveland Foundation
Grantmaking Expertise Professional staff, if any (unusual for a small foundation) The Cleveland Foundation staff assistance to review and monitor proposals. The Cleveland Foundation staff assistance to review and monitor proposals
Control Trustees have complete control of distributions and responsibility for asset management Donor-advisor may make grant recommendations. Own board of directors, a majority of whom are appointed by the Cleveland Foundation
Cost Costs include legal and accounting fees, insurance, office space, staff and miscellaneous expenses. No cost to establish. Annual fees assessed are: $250 for funds established with under $25,000; 90 basis points for funds between $25,000 and $1 million; and 50 basis points for funds
over $1 million
No cost to establish. Annual fees are 75 basis points for funds with assets from $5 million to $7 million, and 50 basis points for funds with assets greater than $7 million on market value of fund plus investment fee

* Adjusted Gross Income