You receive maximum tax benefits. The tax treatment of gifts is often not as favorable. Classified as a public charity, there is no excise tax. A federal excise tax is charged on gross investment income. Administrative costs are shared and kept to a minimum.
Administration can be costly.
The purpose of the fund can change as community needs change. Expensive court proceedings may be required to change the original purpose if it becomes outdated. Even the smallest funds benefit from the economies and efficiencies of scale, and from the Community Foundation s professional staff and its responsible Board oversight. Most private foundations are too small to afford staff, liability insurance, and reasonable investment fees. Tax filings and complying with federal regulations can be burdensome.