Should You Use a Private Foundation or a Donor Advised Fund?
When my clients want to make a charitable gift that will be given to charity in future years, there are two primary vehicles for managing the funds. One choice is a donor advised fund, which can be established at the Community Foundation of Middle Tennessee, the Jewish Federation of Nashville, or various other organizations. The advantages of a donor advised fund are summarized at the bottom of the attached link to the website of the Community Foundation of Middle Tennessee.
The potential benefits of a private foundation are discussed in the attached paper from the Foundation Source.
I have worked with numerous donor advised funds and private foundations and they both serve a useful purpose. Whether a private foundation or donor advised fund is right for you depends upon a number of factors. As a general rule, I encourage clients who are setting aside less than $1 million to use a donor advised fund.
