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Charitable vehicles comparison

Donor-advised fund or private foundation

Charitable vehicles comparison image

Creating a successful charitable giving plan begins with understanding the differences between various charitable vehicles. Here we compare two frequently employed charitable planning vehicles — the donor-advised fund (DAF) and private foundation to help you structure and plan your giving. For more detailed information about these solutions, please contact your advisor.

 

 

 

 

 

Donor-advised fund (DAF) Private foundation
Maximum tax deductibility as a percentage of Adjusted Gross Income
(excess may be carried over five years)
Cash: 60%
Publicly traded securities: 30% 1
Nonfinancial assets: 30% 1
Cash: 30%
Publicly traded securities: 20% 1
Nonfinancial assets: 20% 1
Grantmaking
Donor makes grant recommendations Donor has full control over and responsibility for grantmaking decisions
Investments
Donor can choose to direct investment portfolio options managed by the DAF sponsor Donors can choose to direct investment management
Privacy
Donor has discretion to grant anonymously Grant activity is a matter of public record
Excise tax on net investment income 2
None 1% or 2% net investment income
Required quarterly tax payments
No Yes
Required annual distribution
No Yes, 5% based on asset value
Donor IRS filing requirement
No Must file tax return (IRS Form 990-PF)
Legal fees/start-up costs
No Yes, required to establish foundation

 

Bank of America's Offerings

Note: An increasing number of philanthropic individuals and families utilize both donor-advised funds and private foundations in a comprehensive charitable giving strategy.

Donor-advised fund (DAF) offering:
The Bank of America Charitable Gift Fund

Administration: Provided by donor-advised fund


Tax preparation: Provided by donor-advised fund


Client type: May be ideal for emerging and experienced philanthropists — self directed donors who desire privacy and maximum charitable impact


Account minimums:

  • Initial contribution: $25,000
  • Ongoing contribution: $250
  • Minimum grant: $250
  • Minimum investable balance: $25,000 4
  • No maximum

Types of assets accepted:

  • Cash, securities and mutual funds
  • Restricted stock and closely held business interests 5
  • Real estate timberland, farms and ranches 5
  • Gas, oil and mineral rights 5

Support from grantmaking professionals: Self-directed; limited support available in developing a charitable giving plan


Family involvement: Unlimited co-advisors


Succession: Unlimited


 

Private foundation offering:
Foundation management services 3

Administration: Broad range of administrative services available


Tax preparation: Only available if foundation is created in a trust form and our firm manages all assets


Client type: May be ideal for philanthropists who prioritize flexibility and control


Account minimums: Greater than $5 million is recommended


Types of assets accepted:

  • Cash, securities and mutual funds
  • Restricted stock and closely held business interests 5
  • Real estate timberland, farms and ranches 5
  • Gas, oil and mineral rights 5
  • Certain nonfinancial, tangible assets 5

Support from grantmaking professionals: Comprehensive support including strategic planning, grantmaking and administrative services, mission development, governance and compliance


Family involvement: Family members and other trusted advisors may be involved in roles such as trustee, director or advisor


Succession: Unlimited


 

Contact us at 888-703-2345 or email us.


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