Some estate planning advisors find it difficult to effectively explain to their charitable-minded clients the differences between private foundations and advised funds. Though they appear to have similar charitable roles, differences exist when it comes to investment management, grantmaking abilities, and donor control. Foundation Source, a foundation management firm, has published a booklet entitled Private Foundations, Community Foundations & Donor Adivised Funds: A Comparison (Foundation Source Press 2011). Included in the booklet is a chart comparing private foundations and donor advised funds. The chart is available below:
Foundation Source Private Foundation
Community Foundation
Donor Advised Fund
Grants to 501(c)(3) charities
Yes
Yes
Yes
Grants directly to individuals (emergency, hardship and medical crisis)
Yes
No
No
Scholarship programs
Yes
Yes*
No
International grantmaking
Yes
Rarely
Rarely
Equity investments
Yes
Rarely
Rarely
Low-interest loans
Yes
Rarely
Rarely
Control over investments
Yes
No
No
Control over grantmaking
Yes
No
No
Control over board
Yes
No
No
Control over staff
Yes
No
No
Ability to hire staff
Yes
No
No
Ability to hire family members
Yes
No
No
Ability to reimburse travel and other expenses
Yes
No
No
Ability to hold closely held stock
Yes
Rarely
No
Ability to hold jewelry, art and other tangible property
