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Community versus Private Foundation

  COMMUNITY FOUNDATION PRIVATE FOUNDATION
TAX POLICIES Taxpayer can deduct up to 50% of adjusted gross income for cash gifts to the Kenosha Community Foundation. For gifts of cash, deduction is limited to 30% of adjusted gross income.
Contributions of appreciated property up to 30% of adjusted gross income may be deducted. Contributions of appreciated property up to 20% of adjusted gross income may be deducted.
No tax is imposed on a fund with the Kenosha Community Foundation. Private foundations are subject to an excise tax of up to 2% of net investment income.
PAY-OUT REQUIREMENTS No minimum pay-out requirement is imposed on a fund with the Kenosha Community Foundation.

Whether or not the foundation earns such an amount, no less than 5% of the foundation’s endowment assets fair market value must  be distributed for charitable purposes.
COSTS A fund at the Kenosha Community Foundation can be established and maintained easily and inexpensively. maintained easily and inexpensively.  Costs are shared among all funds. Establishing and maintaining a private foundation may require substantial fees and operating expenses.
SELF-DEALING These regulations do not apply and a community foundation can conduct business
with its contributors and managers in transactions that yield the foundation advantages.
Self-dealing between a private foundation and those who manage, control, or make large gifts to it and persons or corporations losely related to them are strictly regulated.  These rules apply without regard to whether the foundation is better off as a result of such dealings.
PUBLIC DISCLOSURE Annual detailed reporting of overall operations is required, but funds established by donors can be treated anonymously (even though the tax return must be made available for public inspection).  Names of contributors need only be revealed to the IRS. Annual detailed reporting of the foundation’s activities is required, and names of donors  are publicly disclosed on the private foundation’s tax return.
SCHOLARSHIPS Community foundations do not have to comply with this requirement. Community foundations will work with the donor to create a selection and award process that meets the needs of the donor and the community. Private foundations must, before making scholarship awards to individuals, obtain the approval of an objective selection and award procedure from the IRS.