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Family
Foundation Format Descriptions
Structured to Suit Your Needs
A family foundation may be established in any of the following forms or
structures:
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We know that your financial
security is as important as the legacy you leave to others.
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The experienced staff at The American
Foundation of Utah can work with you and/or your professional tax advisers to
help you determine which type of family foundation account is best for you.
Format
Descriptions
Component
Family Foundations
(A component charitable foundation account at The American Foundation of Utah).
This type of foundation is highly preferred for all foundations regardless of
size. A family foundation is a charitable account created to provide ongoing
financial support to donor recommended charities. Assets donated to The
American Foundation of Utah for a
family foundation are managed to achieve income and/or growth, and then all
or part of the annual income or growth is distributed to family selected
charities. This is the simplest and easiest family foundation format to
operate. Cash or assets are transferred directly to The American Foundation
of Utah for the particular family foundation account of the donor
establishing the fund. This foundation is established with a minimum deposit
of $5,000.
The American Foundation of Utah is a
qualified 501(c)(3) public charity. All of its family foundation component
accounts qualify for the same public charity tax status. Donors qualify for
the highest tax deductions - up to 50% of AGI for contributions of cash and 30% of AGI for donations of appreciated properties. Excess
deductions can be carried forward for five years. The assets are managed for
income and growth. The donor or the donor's designee makes recommendations
for grants of all or part of the annual income and growth to qualified public
charities.
Unless specifically noted otherwise,
all donations accompanying an application will establish this preferred and
standard component family foundation with The American Foundation™.
Support
Organization
A support organization is a foundation formed to support a particular charity
or cause. A support organization is an entirely separate entity with its own
501(c)(3) tax status.
The American Foundation of Utah has
pioneered the use of support organizations as family foundations. A family
foundation affiliated with The American Foundation of Utah, can provide
special benefits.
This type of foundation is a public
charity, so donors receive the highest tax deductions - up to 50% of AGI for contributions of cash, and 30% of AGI for donations of appreciated property. Excess
deductions can be carried forward for five years. The support organization
format is well suited for very large foundations where the donor wants
continued hands-on administrative involvement. It can be set up as a trust or
a corporation, depending on its size and nature. The American Foundation of
Utah will help you determine which format is best for your situation.
The donor or selected family members can
be appointed as trustees or board members. Special procedures are implemented
in the governing documents and by-laws to ensure continued adherence to the
donor's charitable mission and objectives. This type of foundation may raise
money as an independent entity, apply for grants, and have its own offices,
officers, employees, and programs.
Private
Foundation
By in large, this approach has fallen out of favor with most tax and
foundation planners because of the reduced tax benefits and burdensome
regulations. However, The American Foundation of Utah can "adopt," convert, and/or administer
existing private foundations, bringing them into its extended Family of
Foundations' operations. And, there are some circumstances that warrant the
creation of private foundations that work in tandem, or in concert, with our
family foundations at The American Foundation of Utah.
This foundation type is a totally separate
and distinct entity. In addition to having increased responsibilities and
liabilities, there are many tax and administrative disadvantages. There are
also other restrictions and limitations that prevent the donor from achieving
many tax and financial objectives that can otherwise be achieved with a
family foundation under our public charity format. Deductions for gifts of
cash are limited to 30% of Adjusted Gross Income, 20% for donations of
appreciated property.
The American Foundation of Utah is well
suited to assist you in the administration of a private foundation. A private
foundation can be best utilized in conjunction with one of our public charity
foundation formats. The synergistic benefit of being part of The American
Family of Foundations is much better than acting alone.
 
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