The term “private foundation” is an oxymoron; private foundations are not private at all. The Richardsons discovered this, along with several other struggles with their foundation, some time ago. Your story may be similar to theirs.
Several years ago Mr. and Mrs. Richardson realized the administration of their private foundation was creating hurdles that kept them from the charitable giving they loved. They were tired of time-consuming IRS compliance and concerned that much of their personal time was being robbed by the administrative requirements of their private foundation. Although they wanted to simplify their grant making process, they also wanted to regain the confidentiality they had lost through their private foundation. Mr. and Mrs. Richardson were concerned that their estate would not be used wisely and in a way pleasing to the Lord after their passing.
Joining a growing trend, they chose to enhance their private foundation with a Giving Fund at a public foundation. Other givers were choosing to shut down their private foundations and roll them into a Giving Fund. The Giving Fund concept was designed as a service by public charities in reaction to the Congressional Tax Reform Act of 1969, which increased regulation of private foundations. The limitations, complexities, taxes and expenses of a private foundation simply disappear with a Giving Fund.
WaterStone can help you overcome the multitude of private foundation hurdles:
In recent years, private foundations have come under increasing scrutiny by Congress and the Internal Revenue Service. Due to recent abuses and questionable practices, foundation managers are under pressure to properly manage the foundation.
Giving Funds are a very attractive alternative since they avoid the administrative responsibilities and provide many other benefits. Converting private foundations into Giving Funds is a growing trend in the nonprofit arena.more
Concerned with 5% grant requirements and maintaining integrity of purpose of your private family foundation?
You can take an easy step to satisfy your 5% grant requirement with a simple transfer from your family foundation to a Giving Fund at WaterStone. This transfer satisfies your 5% obligation immediately, avoiding penalties for failure to meet minimum distribution requirements, and permits you the extra time to make final decisions regarding your preferred charities and charitable projects.
With a WaterStone Giving Fund, the complexities and time consuming due diligence of the private foundation grant process is eliminated. In its place is a simple online Giving Fund grant distribution process allowing you to give to your selected charities. WaterStone handles the due diligence involved in making gifts and investments. Depending upon your needs, you may simply enhance your family foundation with the addition of a Giving Fund, or completely dissolve your family foundation into a...more
Irritated by public access to your benevolence through your private family foundation?
You can take steps now to begin reducing the number of unsolicited requests for funds you receive every year. A Giving Fund at WaterStone is like a “super” private foundation but with added flexibility and confidentially. Depending upon your objectives, you may simply enhance your family foundation with the addition of a Giving Fund, or completely dissolve your family foundation into a Giving Fund. WaterStone has the experience to assist you with either approach.
With a Giving Fund you can close the public window to your giving lifestyle because grants made through your Giving Fund will not be personally identifiable on public records. However, you may choose to be recognized by your supported charities or choose your own level of anonymity.
At WaterStone, your personal information will be maintained with the highest level of confidentiality and respect for your privacy. We will not sell,...more
Tired of time consuming IRS compliance?
You can take an easy step now to reduce or eliminate the time-consuming efforts to satisfy the increased scrutiny of your private foundation by Congress and the IRS. The onus on your foundation manager to properly manage your private foundation has increased dramatically, along with the annual administrative costs. According to the IRS this record keeping and tax return preparation takes an average of 200 hours a year. And the Form 990-PF is more complicated and time consuming than ever!
A WaterStone Giving Fund is the relief you’ve been looking for to reduce or eliminate the record keeping, filing and other administrative responsibilities associated with a private foundation. With a WaterStone Giving Fund, WaterStone has complete fiduciary responsibility, and your annual administrative costs are much lower because of economies of scale and the elimination of a separate tax return.
With a private family foundation, the Federal Government is...more
Frustrated by the tax headaches of your private family foundation?
You can take steps now to secure the tax advantages of a Giving Fund at WaterStone. Depending upon your needs, you may simply enhance your family foundation with the addition of a Giving Fund, or completely dissolve your family foundation into a Giving Fund. WaterStone has the experience to assist you with either approach.more
How To Roll A Private Foundation into a Giving Fund
Dennis Thomas, Attorney at Law
Now you can “have your cake and eat it too” by rolling your private foundation into a Giving Fund operated by a qualified public charity (an IRS 501(c)(3) organization). The roll over to the Giving Fund is very easy to accomplish and does not have any adverse tax effects.
Private foundations are wonderful tools for charitable giving. They allow the giver, through the Board of Directors of the private foundation, to distribute funds for a wide variety of charitable purposes.
Private Foundation Restrictions
There are, however, many restrictions on private foundations that do not apply to public foundations. Private foundations have very severe restrictions against “self dealing,” have annual mandatory distribution requirements, are not allowed to have any “unrelated business income,” qualify for only a “30% of income” income tax...more
Many families frustrated by the upkeep of their private foundation are choosing to unwind their foundation into a Giving Fund at a public foundation. The following checklist can help you through the necessary steps, in the most logical order, to convert or dissolve your private family foundation to a WaterStone Giving Fund: