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CF vs. Private Funds

Community Foundations Maximize Client Donations in Comparison to Private Foundations

A community foundation, such as Taos Community Foundation, is supported by the public and governed by a Board of area residents who represent the public interest. It is different from a private foundation in that it is not subject to the control of an individual family or group, and because of this distinction, a community foundation is classified by the Internal Revenue Service as "not a private foundation" but "a public charity".

Public charity status entitles a community foundation's donors to tax deductions that are superior to those accorded to a private foundation's donors. It is also not subject to tax on its investment income, certain public disclosure requirements, and restrictions on making certain types of grants, holding certain kinds of property, and engaging in certain charitable activities as are private foundations.

For these reasons, many individuals, families, and businesses are better able to achieve their charitable goals with a fund at a community foundation than by establishing or maintaining a private foundation. A family or group can establish an Affiliated Fund within Taos Community Foundation, which acts much like a private or family foundation. It is named by the donor and can have its own Board of Directors and customized investment and grant making policies.

Here are a few of the important distinctions between a community foundation and a private foundation: