Donor-Advised Funds and Private Foundations QUESTIONS TO ASK CLIENTS INTERESTED IN CHARITABLE GIVING

BY TESSA BARNEY SENIOR ADVISOR, PHILANTHROPIC SERVICES OMAHA COMMUNITY FOUNDATION

What is the best giving vehicle to accomplish your client’s goals? Two popular choices are private foundations and Donor-Advised Funds (DAFs). Both offer tax advantages and options to create succession plans to continue philanthropic efforts after donors’ lifetimes.

There are benefits to both models, but they differ structurally and operationally.

Donor-Advised Funds

DAFs are the fastest growing type of fund in the nation for good reason: they are tax-smart, simple to manage, and help donors and their successors manage their charitable giving from a single source. A DAF at the Omaha Community Foundation is an incredibly flexible giving vehicle that allows your clients to support a single nonprofit or dozens of organizations.

Private Foundations

Private foundations allow individuals or families to organize and target their charitable giving for a set amount of time or across generations. They offer expanded giving opportunities, and investments and grants are overseen by a board of directors or trustees.

Questions to ask your clients considering one or both of these giving vehicles:

1. Do you have the time to operate a private foundation, or will you hire staff?

A private foundation is subject to stringent tax laws and regulations that require managing detailed records and administrative work as well as startup costs and legal fees. The Omaha Community Foundation can assist clients who do not have the time to oversee the day-to-day operations of a private or family foundation by supporting the administration, grantmaking, and governance of the foundation.

2. Do you want to involve your family in your charitable giving?

It is important for your clients to have ongoing conversations with those they plan on engaging in future charitable giving, whether that be family members or other future board members. The Omaha Community Foundation team can facilitate meaningful dialogue around values, charitable intent, and mission to ensure future giving through a DAF or private foundation continues to support the organizations and causes meaningful to your clients.

3. What types of organizations or initiatives do you want to support?

DAFs can only grant to 501(c)3 public charities, while private foundations have greater flexibility in how they can distribute their funds. The Omaha Community Foundation can partner with you to create customized giving plans for your clients whether using a DAF or a private foundation. We provide a range of services including operational support, facilitating family giving meetings, grantmaking, and succession planning.

The Omaha Community Foundation can assist you and your clients regardless of the giving vehicle they choose – private foundation, DAF, or both. Contact Tessa Barney, Philanthropic Services Senior Advisor, at 402-933-4205. You can also learn more about our services at OmahaFoundation.org.