Private Foundation Services

The California Community Foundation provides a number of philanthropic services to resolve private foundation management concerns.

Private Foundation Challenges

Over time, private foundations have come to us with some the following concerns:

• The original purpose of the foundation no longer has the urgency it once did
• As operating costs increase and government regulations multiply, financial factors make it difficult for the foundation to operate effectively
• The foundation’s board has lost members though resignation and death, and has found it difficult to attract new members
• Future generations will not continue to fulfill the founder’s charitable interests
• The founder desires that his or her children focus on the family’s philanthropy, not on the foundation’s investments and administration
• When faced with these challenges, the California Community Foundation provides a sensible alternative. By transferring your foundation into a fund at the community foundation, you can be confident that intelligent, directed grantmaking will continue in the name of the foundation and for generations to come.

You can choose to open a field of interest fund, a donor advised fund or a supporting organization, and the benefits will be the same: reduced administrative burdens, maximized charitable giving and the assurance that your foundation’s work will continue as intended.

Terminating a Private Foundation

Section 507 of the Internal Revenue Code permits the termination of a private foundation in either trust or corporate form and the distribution of its assets to a public charity.

The California Community Foundation qualifies as a public charity into which a private foundation may distribute all of its assets. Such a termination not only releases the private foundation from the reporting requirements of the Code, but also terminates the payment of the excise tax imposed on private foundations.

The first step in the termination process is the establishment of a fund at the community foundation into which your foundation’s assets will be distributed. Next, the foundation must submit a letter to the California Attorney General’s office requesting a waiver of objections to the transfer of the assets of the foundation to CCF. In some instances, a petition to the Superior Court requesting approval of the termination may be required.

Using a Private Foundation’s Income to Create a Fund

On occasion, the trustees of a private foundation have had difficulty deciding on a sufficient number of grants to meet the annual five percent payout requirement.

A solution is to create a fund at the California Community Foundation, named for the private foundation, and to contribute all or part of the current year’s income to the fund.

The private foundation’s contribution to CCF is a “qualifying distribution” that counts toward the payout requirement. You can take your time and deliberate on the grants to be recommended from the fund and gain the added benefit of our philanthropic services.

Grantmaking Services for Private Foundations

A private foundation may have ambitious grantmaking plans but a small or nonexistent staff to execute them. In situations such as this, the trustees rely greatly on the volunteer time of board members and have difficulty administering a full grantmaking program.

Your private foundation can retain the community foundation to assist in developing its grantmaking initiatives. The combined expertise of our staff can prove to be an invaluable asset to your organization. By tapping into our philanthropic services, the trustees can identify important community needs and achieve the impact that was originally envisioned.

To learn more about our services for private foundations, contact Eric Grodan, director of gift planning, at (213) 413-4130.

Back to Comparison Chart