Have you ever considered starting your own private family foundation? For those who have causes you are passionate about, creating a family foundation gives you the opportunity to benefit the people, places, or things you care about most, and in a way that speaks to you. Not only can you benefit others, but there are benefits for you as well.
Tax Benefits of a Family Foundation
There are several tax benefits to starting a family foundation, including:
- Donors get an immediate tax deduction upon their initial gift
- Donors can avoid capital gains tax when selling donated appreciated property
- Nearly tax-free earnings on the foundation’s assets
- Minimizes estate tax liability for the donor
- Enhances the ability to ensure donor intent is honored
Management Benefits
By setting up your own family foundation, you have more control in managing the assets and determining how the assets are spent. You are able to:
- Directly hire the qualified professionals who properly manage funds and disbursements
- Segregate designated foundation funds from your other assets so that your contributions remain intact should there be issues with your other assets
- Provide more control over how you choose to support charitable grantees
- Provide greater ability to enforce the terms of restricted gifts better protecting donor intent
Related: Is It Time to Form a Corporate Foundation?
Familial Benefits
As we mentioned before, it’s a great feeling when you’re able to help others. By doing so through a foundation, you’re able to help your family as well.
- Should there be concerns about how future generations will handle your money, a family foundation provides them an opportunity to learn to gift and to do so wisely
- Provides employment opportunities for members of the family who wish to be more directly involved in foundation management
- Establishes a charitable legacy that can live on and reflect positively on the family name
As you can see, there are many benefits to establishing and running a family foundation. If you’ve been considering starting your own foundation, I encourage you to reach out to Caritas Law Group today to discuss how we can help you create a family foundation.
Related post: Why Start a Private Foundation?
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.