The CPA Desk

A Thought Leader Production by PKFTexas

The Best-Suited Charity Vehicle for Family Philanthropy – What to Consider

The Houston Business Journal published an article on their website co-authored by PKF Texas Tax Practice Leader and Director, J. Del Walker, CPA, and Tax Manager, Annjeanette Yglesias, CPA. The article discusses the differences between a private foundation (PF) and the donor advised fund (DAF), which impact family philanthropy efforts.

So, what are the differences? Walker and Yglesias primarily define the two terms:

“A private foundation is an IRC Section 501(c)(3) organization that has one primary source of funds, typically either from an individual/ family but may also be a business. This discussion focuses on private non-operating foundations, otherwise known as grant-making foundations.

A donor advised fund (DAF) is a separately identified fund or account that is maintained and operated by an IRC Section 501(c)(3) organization (public charity). Once the donor contributes to the DAF, the managing organization legally controls the funds going forward. The donor only maintains advisory privileges with respect to amount and recipient of distributed funds.”

The co-authors then present various things to consider when deciding which is better suited for donors and philanthropic goals:

  • Formation,
  • Administrative considerations,
  • Tax implications to donors
  • and more.

For the full article, visit www.bizjournals.com/houston/news/2018/10/09/family-philanthropy-tips-on-private-foundation-vs.html

To learn more information, contact J. Del Walker (dwalker@pkftexas.com) or Annjeanette Yglesias (ayglesias@pkftexas.com).