The Likely Impact of Setting Up Philanthropic Foundations
There are a number of advantages to setting up a private foundation, most importantly a foundation gives philanthropists flexibility in achieving charitable gifting aims. Foundations provide opportunities for planned giving by individuals and their families, as they retain control of the foundation or donor advised funds.
Running your own foundation means you take decisions on where your funds are invested, so giving you more ongoing interest in the foundation’s investments. You also decide on where the income will be distributed and which charities will be funded. Very often great financial planning means charitable foundations survive the death of their founder and can be administered by the next generation in the family.
If you set up a private foundation you will find startup costs and legal fees essential, as there is a necessity for professional advice in the set up phase, there is also an ongoing requirement for professional auditing and investment management costs. Donor advised funds can be much easier to manage, there is just one simple account to set up and investment managers to put in place. Once the donor advised funds account is in place, you and your family can choose the charities to support on an annual basis.
The benefit of running a private foundation can be immense when it comes to tax credits and tax deductions. These benefits will be explained in full at the time you set up your charitable foundation, with details on the best way your funds can be managed.