Private foundations and donor-advised funds, the two chief charitable giving vehicles in the U.S., receive different regulatory and tax treatment. At present, private foundations are subject to stricter regulations, and DAFs receive more favorable tax treatment, according to Foundation Source, which provides support services for private foundations.
Articles about these giving vehicles’ regulatory and tax treatment regularly appear in the media, and as often as not, their spin is negative.
“Until now, however, the opinions of individuals who have firsthand experience donating via these vehicles, or are actively considering establishing one, have been absent from the conversation,” Page Snow, chief philanthropic officer of Foundation Source, said in a statement. “Their answers about what they consider appropriate can provide helpful insight to inform this discussion.”
Foundation Source this month released the results of an online survey conducted among 205 U.S.-based respondents, of whom 84 had private foundations, 31 had donor-advised funds, 36 had both a private foundation and a DAF and 54 had no charitable vehicle.
The survey asked respondents how they viewed the discrepancies in regulations and tax incentives of private foundations and DAFs.
Respondents overwhelmingly favored a more level regulatory playing field, the survey found.
Eighty-six percent said donations to private foundations and DAFs should enjoy the same tax treatment, while 65% considered the 5% minimum distribution requirement for private foundations “just right,” and 57% said DAFs should be subject to a similar requirement.