Turnkey Family Foundation Program

Family Foundation Format Descriptions

Structured to Suit Your Needs
A family foundation may be established in any of the following forms or structures:

We know that your financial security is as important as the legacy you leave to others.

 

The experienced staff at The World Foundation 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 World Foundation).
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 World Foundation 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 World Foundation for the particular family foundation account of the donor establishing the fund. This foundation is established with a minimum deposit of $5,000.

The World Foundation 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 World Foundation has pioneered the use of support organizations as family foundations. A family foundation   affiliated with The World Foundation, 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 World Foundation 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 World Foundation 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 World Foundation.

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 World Foundation 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 and World Family of Foundations is much better than acting alone.

 

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