STWDF VERSUS A PRIVATE FOUNDATION
As donors, you have a choice. You can establish a private foundation or you can establish a fund with us. If you establish your own private foundation, you must:

• File a detailed annual federal tax return (Form 990PF) and required schedules.
• Pay excise tax on net investment income including net capital gains. (The tax will vary from 1 to 2% of such income depending on whether the Foundation meets certain payout requirements).
• Publish in a local paper notice of the annual federal tax return's availability.
• Make sure grants paid out each year equal or exceed 5% of the Foundation's asset value and that grant administration costs qualifying as payout do not exceed .65% of assets.
• Assume expenditure responsibility for certain grants paid to tax-exempt organizations that are not "publicly supported."
• Make certain that the total of voting stock held by the Foundation, donor and other "disqualified persons" (including members of the Board) does not exceed 20% of the corporation's voting stock (or 35% of the corporation's voting stock, if it can be established that effective control of the corporation is in the hand of other, nondisqualified persons.)
• Avoid a long list of transactions held to be "self-dealing".
• Avoid investments that jeopardize the charitable purposes of the Foundation.
• Pay additional taxes for failure to take corrective action.

If you establish a Fund with us, we do it all for you PLUS:

• The fund becomes part of a publicly supported organization.
• The donor may get a larger tax deduction for current and future gifts.
• Since the fund doesn't pay excise tax there frequently is more available for charity.
• The fund can be set up in one day, rather than requiring months.
• The fund is managed by a full-time, staffed organization with expert advisors. The Southern Tier West Development Foundation does not provide legal or financial advice. You are encouraged to contact your legal and financial advisors when considering establishing a fund or making a planned gift to the Foundation.

See also - Transferring Assets from a Private Foundation

At the STWDF:	In a Private Foundation:
Funds can be established in a day	Funds take months to establish
Inexpensive to establish/administer	Expensive to establish
Equally appropriate for any size assets	Typically established with large assets
No annual report to file	Must file its own detailed tax return
No requirement for annual payouts	Requires 5% payout of asset value
No excise taxes	Annual excise tax of up to 2% on net investment income
Full market value deduction for gifts of appreciated property	Deduction at cost basis only for appreciated value
Deduct up to 30% AGI for appreciated property; 50% for cash	Deduct up to 20% AGI for appreciated property; 30% for cash
Low annual management fees	Costly ongoing administration
Donor can involve family and heirs in charitable giving	Donor can involve family and heirs in charitable giving
Anonymity can be maintained, if desired	Required public disclosure
No penalty taxes	Penalty taxes may be imposed for excess business holdings or self-dealing
Professional staff can provide consultation for grant making	May need to obtain expert advice for effective grantmaking
Can be established during lifetime or through trust or estate	Can be established during lifetime or through trust or estate
Fund name chosen by donor	Foundation name chosen by donor