Private Foundation vs DAF

 

Your clients have likely heard of private foundations but may be less familiar with Donor Advisor Funds and might wonder how they compare. Generally speaking, a private foundation gives the donor the most control; however, it is a lot more work to manage and administer and is not as ‘private’ as the name would suggest.

On Deciding Between A Private Foundation And A DAF Consider The Following:

  • How much time is your client prepared to commit to manage and administer the private foundation/DAF?

  • Does your client want to have full control on operational, investment and granting decisions?

  • How much is your client comfortable spending on external administration?

  • Does your client want to be publicly recognized for their gifts?

  • Does your client need an immediate tax deduction, for example for year-end tax planning?

 

Head-To-Head Comparison

 

Private Foundation Advantages

  • Donor has full control over:

    • Invested assets

    • Grants to charity

  • Registered directly with CRA

  • Public recognition of generosity

 

DAF Advantages

  • Quick to set-up (1-2 days vs. 6-12 months for private foundation)

  • No administration and lower costs

    • Record keeping and reporting to CRA handled by DAF foundation

  • Choice of recognition or anonymity with charities

  • Personal data is not published on CRA’s website for public consumption

  • Lower entry point

 

Click here for a more detailed comparison of a private foundation versus a DAF.