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- JUDICIAL CONSENT NOT FOR PROFIT TRANSFER NEW YORK CODE
- JUDICIAL CONSENT NOT FOR PROFIT TRANSFER NEW YORK PROFESSIONAL
Section 507(b)(1)(A) of the Internal Revenue Code permits a private foundation to terminate its status tax-free upon transfer of all of its net assets to one or more organizations described in Code Section 170(b) (1)(A) (other than in clauses and ). That leaves more money for what the donor intended-supporting important work. In addition, because a community foundation is a public charity, a fund at a community foundation pays no excise taxes, is exempt from private foundation reporting requirements, and operates with minimal administrative costs. In any event, the funds maintained by a community foundation benefit from the investment and administrative capabilities of a major institution. Donors may choose whether a fund bears the donor’s name or is anonymous, whether the fund is structured to last in perpetuity, and whether the charitable purpose of the fund is restricted.
JUDICIAL CONSENT NOT FOR PROFIT TRANSFER NEW YORK PROFESSIONAL
These include donor-advised funds (where the founder of the fund and those they designate may recommend grants) and field-of-interest funds (from which the community foundation’s professional program staff makes grants through a competitive process). A community foundation is an aggregate of individual charitable funds.
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How can a family’s charitable work be carried on without these headaches? In many cases, a sensible alternative may be to dissolve a foundation and transfer its assets to a community foundation, such as The New York Community Trust. Ditto the public nature of much private foundation information, including the names of substantial donors and the amounts they contribute. The mere prospect of the private foundation excise taxes-including an annual tax on a foundation’s net investment income-has caused more than a few sleepless nights for those with stewardship responsibilities for a family foundation. In difficult financial times, a decline in asset values could reduce the amount available for grants and make the costs of maintaining the foundation disproportionately high relative to the funds being granted.ĭeclines in the portfolio also may cause heartburn as board members worry about their fiduciary responsibilities. Over time, a donor’s family may lose interest or be unable to administer the foundation, and new board members may be hard to find. Decisions about leadership and the priorities and strategies for grantmaking may be sources of contention, and the myriad details of the grantmaking process and public accountability may be more work than the family anticipated. Are the unavoidable costs of just being a private foundation worth it?Įven large family foundations can present problems. In 2013, 60 percent of family foundations reported assets of less than $1 million, and 53 percent reported total annual grants of $50,000 or less. Yet using a private foundation as a vehicle for giving also can become a burden-perhaps more time-consuming and expensive than the size of the foundation warrants. Giving should be satisfying and enjoyable, despite the seriousness of the purpose. But private foundations have significant drawbacks, ranging from overhead to succession problems. In addition to providing tax benefits, a foundation can help donors engage family members, focus grantmaking, and, potentially gain visibility for the family or a favorite cause. Philanthropists have used private foundations for more than a century to support charitable causes, but the recent increase in the number of private foundations has been nothing short of astonishing-from 36,800 in 1996 to more than 87,000 in 2013. Information for Current Donors, Professional Advisors, Nonprofits.