Do good, greater.
Converting a Private Foundation to a Philanthropic Fund
If you would rather focus more of your energy on giving to the community and less on the administrative work of running your private foundation, consider converting to a philanthropic fund. Converting to one of several fund types at the Hawai‘i Community Foundation is a simple, streamlined process that involves the transfer of assets to HCF.
By converting your private foundation
A donor-advised fund at HCF is a simple and flexible option that enables donors to keep their foundation’s identity and recommend grants to charities of their choice. Similarly, a signature fund at HCF offers as much hands-on involvement as desired; it can be managed much like a foundation with a committee of advisors making grant recommendations. Whatever type of fund you choose, the Hawai‘i Community Foundation will handle all of the administration, reporting, and filing required.
into a philanthropic fund at the Hawai‘i Community Foundation (HCF), you can avoid the administrative, compliance, and tax burdens of maintaining the private foundation, and still fulfill your foundation’s charitable purpose.
A philanthropic fund offers several benefits:
It is SIMPLE to set up
There may be significant TAX ADVANTAGES
The names of donors and grants can be kept CONFIDENTIAL
There is NO MINIMUM distribution requirement
Converting a Private Foundation to a Philanthropic Fund Continued
What are the costs involved in converting my private foundation into a fund at the Hawai‘i Community Foundation? There are no set-up costs at HCF, but there may be some costs associated with terminating your foundation. You may want to check with your professional advisor.
Can the fund keep the name of my private foundation? Yes. For example, the John Smith Foundation could establish the John Smith Foundation Fund. Grants from the fund can be made in the name of the fund or anonymously. Donors choosing to convert to a signature fund can retain the original name, i.e., the John Smith Foundation, and use a customized letterhead if desired.
Can our founder/board of directors still have input regarding grants from the fund? Yes. If your private foundation decides to create a donor-advised fund, you can designate who the fund advisors will be. Fund advisors can recommend both the amount and the recipient for grants made from the fund. A private foundation that converts to a signature fund may choose to have an advisory committee that operates like a foundation board in making grant recommendations. If you decide to create a scholarship fund, your participation in the selection of scholarship recipients is limited.
Can prior donors to my private foundation continue to make contributions to our HCF fund? Yes. Contributions can be made to your fund on an ongoing basis and will provide your contributors with greater tax benefits than they would have received from donations to your private foundation.
Interested in relieving yourself of the administrative burden so that you can spend more of your time on the charitable giving from your foundation? We will work with your tax and legal advisors to find the best solutions for you. To get started, contact Amy Luersen, Vice President of Community Grants & Investments, at (808) 566-5550 or aluersen@hcf-hawaii.org. HawaiiCommunityFoundation.org