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Community vs. Private

	Community Foundation Fund in Your Client's Name	Private Foundation
IRS charitable status	501(c) (3) & 509(a)(1) (public charity)	501(c)(3)(private foundation)
Ease of establishment, incorporation and tax exemption	No corporation or trust required. Automatically covered by the Community Foundation's tax exempt status.	Corporation or trust required. Must apply to IRS for tax-exempt status using Form 1023. (May take six months or longer to process)
Minimum payout requirements	None. Can accumulate toward a sizable project or grant or reduce giving in a year when returns are low to protect principal.	Yes. Minimum 5% of average asset value each year under IRC Section 4942. Must meet the minimum distribution rules whether or not the foundation's investments earn that amount in a given year.
Donor and family can choose to be involved in grantmaking	Yes	Yes
Separate annual IRS tax return required	No	Yes
Privacy	Yes. Indivdual fund assets size, gifts and grantmaking are kept private and confidential. No public disclosure is required. Donors are generally recognized for grants disbursed, but can remain anonymous with Community Foundation serving as buffer.	No. Private foundations are required to file detailed tax returns on grants issued, investment fees, trustee fees, staff salaries, asset size, etc. and to publish a notice that the return is available for public viewing (IRS Form 990-PF). These public records are often compiled into grant-seeker directories.
Investment, accounting, audit and tax returns	The Foundation handles all investments and accounting. No tax filing required, reported as part of the Community Foundation's annual reporting.	Trustees must perform, contract or hire staff for these services.
General administration	Community Foundation handles all financial and administrative management.	Trustees must perform, contract or hire staff for these services.
Grant administration	If donor wishes, Community Foundation can identify potential recipients, investigate applicants, make grant payments and monitor performance.	Trustees must perform, contract or hire staff for these services.
Insurance	Advisors to funds are covered by Community Foundation liability and office insurance policies. Only fundraising events and other activities will require insurance.	Liability insurance for directors and officers, employee bonding, and office insurance must be purchased.