Tax Benefits

Tax Treatment of Endowments

	Private Foundation	Community Foundation
Tax Policies	For gifts of cash, deduction is limited to 30%	Taxpayer can deduct up to 50% of adjusted
	of adjusted gross income.	gross income for cash gifts to the
		Kenosha Community Foundation.
	Contributions of appreciated property up to	Contributions of appreciated property up to
	20% of adjusted gross income may be	30% of adjusted gross income may be
	deducted.	deducted.
	Private foundations are subject to an excise	No tax is imposed on a fund with the
	tax of up to 2% of net investment income.	Kenosha Community Foundation.
Pay-out	Whether or not the foundation earns such an	No minimum pay-out requirement is
Requirements	amount, no less than 5% of the foundation's	imposed on a fund with the Kenosha
	endowment assets fair market value must	Community Foundation.
	be distributed for charitable purposes.
Costs	Establishing and maintaining a private	A fund at the Kenosha Community
	foundation may require substantial fees and	Foundation can be established and
	operating expenses.	maintained easily and inexpensively. Costs
		are shared among all funds.
Self-Dealing	Self-dealing between a private foundation and	These regulations do not apply and a
	those who manage, control, or make large	community foundation can conduct business
	gifts to it and persons or corporations closely	with its contributors and managers in
	related to them are strictly regulated. These	transactions that yield the foundation
	rules apply without regard to whether the	advantages.
	foundation is better off as a result of such
	dealings.
Public	Annual detailed reporting of the foundation's	Annual detailed reporting of overall operations
Disclosure	activities is required, and names of donors	is required, but funds established by donors
	are publicly disclosed on the private	can be treated anonymously (even though
	foundation's tax return.	the tax return must be made available for
		public inspection). Names of contributors
		need only be revealed to the IRS.
Scholarships	Private foundations must, before making	Community foundations do not have to
	scholarship awards to individuals, obtain the	comply with this requirement. Community
	approval of an objective selection and award	foundations will work with the donor to create
	procedure from the IRS.	a selection and award process that meets the
		needs of the donor and the community.