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Differences Between Community Foundations and Private Foundations

Community foundations give donors benefits not available through private foundations.

The chart below briefly summarizes the key differences between community foundations and private foundations.

Charitable Fund at Community Foundation of Central Illinois

Private Foundation
Organizational Structure
Donors establish individually named funds within the corporate structure of CFCI Donor must establish a separate nonprofit corporation and apply for federal tax exemption with articles of incorporation, and bylaws
Donors can guide grant making activities of their funds Donor operates own grant program and manages contact with fund seeking community
CFCI files one federal and one state tax report for all of it's funds Donor is responsible for investments, accounting, and state and federal reporting
Tax Deductions for Donors
Donor receives 100% fair market value charitable deduction for gifts of publicly traded stock, closely-held stock, real estate, and other long-term capital gain property Donor currently receives a fair market value charitable deduction only for gifts of publicly traded stock. The deduction for gifts of other appreciated property, such as real estate or closely-held stock, is limited to the donor cost basis
Gifts of cash are deductible up to 50% of the donor's adjusted gross income with a five-year carryover for any excess Gifts of cash are deductible up to 30% of the donor's adjusted gross income with a five-year carryover for any excess
The fair market value of gifts for appreciated securities or real estate are deductible up to 30% of the donor's adjusted gross income with a five-year carryover for any excess Gifts of appreciated property are deductible up to 20% of the donor's adjusted gross income with a five-year carryover for any excess
Federal Tax
CFCI is exempt from most federal and state taxes Subject to federal tax of up to 2% annually on invested income
Pay-out Requirement
No IRS requirement that any amount be paid out annually in grants IRS requires an annual grant pay-out of 5% of assets

The Community Foundation of Central Illinois is confirmed in
compliance with National Standards for U.S. Community Foundations

Community Foundation National Standards