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Alternatives to Private Foundations


Many types of funds give you the flexibility of a private foundation without the administrative burden or expense. In addition, your gift qualifies for the highest level of charitable tax benefits. You may establish your fund in your name, the name of your family or the name of someone you wish to honor or remember.

You can establish a personalized fund that gives you the flexibility to support what's important to you and be as involved in your philanthropy as you wish.
  • Grants will be made in the name that you choose for your fund.
  • You will receive immediate tax benefits, but distributions from your fund may be made over time.
  • Your gift will be invested, and tax-free growth may allow you to give more.
  • You may establish your fund as an endowment that will continue to make distributions forever.

Donor-Advised Funds


A donor advised fund is a personal expression of your tzedakah. It aligns your philanthropic interests with the Jewish community's needs and priorities, benefitting the Jewish community into the future. By nominating your children to recommend grants now or as your successor, you enable them to carry on the family tradition, l'dor v'dor.

Basics

  1. You establish your donor advised fund at a Federation or Jewish Community Foundation with an irrevocable gift of cash or other assets.
  2. You receive an immediate tax deduction.
  3. Your gift is invested according to the policies of the sponsoring Federation or Jewish Community Foundation, with a view toward growing your charitable dollars.
  4. You and your heirs or other advisors that you designate recommend grants from your fund to support the Federation, Jewish Community Foundation or other charities in your local community, the United States or Israel.
  5. When its board has reviewed and approved your grant recommendation, the Federation or Jewish Community Foundation makes the grant in your fund's name.

Benefits

  • Your sponsoring Federation or Jewish Community Foundation handles the paperwork, investment and administration of your fund.
  • You receive written tax acknowledgments for your contributions and periodic statements showing your fund's investment return and the grants that your fund has made.
  • You avoid the start-up costs of a private foundation, on-going legal and accounting costs, and the excise tax that a private foundation pays on net investment income.
  • Gifts to your donor advised fund qualify for the highest of charitable tax benefits, unlike gifts to a private foundation.

Supporting Foundations


A Supporting Foundation provides a unique vehicle for involving your family in the covenant of philanthropy. It functions very much like a private family foundation, but because its purposes are aligned with the Jewish community's needs, you receive tax benefits that would not be available with a private foundation.

Basics

  1. You establish your Supporting Foundation with an irrevocable gift of cash or other assets.
  2. You name your Supporting Foundation and select its mission and the organizations and issue areas it will support.
  3. The Supporting Foundation operates as a separate 501(c)(3) charity, and your Federation or Jewish Community Foundation helps to prepare the required federal and state filings and reports.
  4. You cooperate with your Federation or Jewish Community Foundation to create a governing board.
  5. The governing board determines the investment policy and grant priorities.
  6. Your Federation or Jewish Community Foundation manages the Supporting Foundation's grant making.

Benefits

  • Family members can participate actively in grant making, and your legacy of giving can pass l'dor v'dor, generation to generation, as successive generations become involved.
  • You can rely on experts at your Federation or Jewish Community Foundation to connect you with effective organizations that can achieve meaningful results.

Unlike private foundations, Supporting Foundations are not subject to minimum payout requirements or excess business holdings rules, nor are they subject to excise taxes on net investment income. Gifts to your Supporting Foundation qualify for the highest level of charitable tax benefits, unlike gifts to a private foundation. We encourage you to contact your local Jewish Federation or Jewish Community Foundation if you have any questions about the best way for you to benefit by establishing a Donor Advised Fund or Supporting Foundation. To find your local Jewish Federation, you may search via our Federation Finder.

If you live in a Network community (in which there is no Jewish Federation or the Jewish Federation is not professionally staffed), a member of the planned giving team at The Jewish Federations of North America would be very pleased to help you.

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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.