OPTION 1: Gifts to Public Charities
Most people choose to give directly to a 501(c)(3) public charity that
is working in their area of interest. This is the most common and
familiar form of charitable giving and is the lifeblood of the nation's
non-profit sector. For donors with the capability to make
substantial gifts of permanent endowment; direct contributions to
individual charities may not always be the most appropriate form of
giving. Once a major gift has been made, the donor has very
limited control over the continued use of the gift and may lose
recognition for the gift after it is commingled with others. In
addition, most donors choose to support more than one charity; but
making and keeping track of tax-effective gifts to numerous
organizations can be cumbersome.
Similarly, many donors have a desire to give back to the community or
they might have a deep interest in a broad charitable cause rather than
an attachment to a particular organization.
Finally, and perhaps the most important, an organization that is serving
the interests of the donor today may change its mission or cease to
exist ten years from now.
OPTION 2: Create Your Own Private Foundation
A second option is to form an independent private foundation. A
private foundation is an independent charity established, controlled,
and maintained over time by the donor or under the instruction of the
donor. Private foundations offer substantial flexibility.
They can be established for virtually any charitable purpose. For
donors, under the right circumstances, the private foundation is a very
satisfying vehicle for charitable giving. The STW Development
Foundation encourages the creation of private foundations by donors in the appropriate circumstances.
For some donors the private foundation option carries
significant drawbacks. First, the tax benefits of some gifts to
private foundations are more limited than those of gifts to public
charities. The foundation's trustees must comply with stringent
IRS regulations. Private foundation tax returns are public
information, affording the donor limited privacy in the operation of the
foundation. Over time, the administration burdens of maintaining a
private foundation may be formidable and costly.
Because of these various limitations, a private foundation often is no a
practical option unless the donor is prepared to make a substantial
commitment of time and/or money. Moreover, after the donor's
death, control of the foundation may pass to heirs or others who may or
may not have the time, skill, or interest to continue the donor's
OPTION 3: Establish a Charitable Fund with the STW Development
Your third option is to establish a personal philanthropic fund through
the STW Development Foundation - a unique hybrid between an operating
charity and a private foundation.