The income received by the charity can be used to establish an endowment fund in the name of the donor. Whereas charitable remainder trusts generate significant income and estate tax deductions, lead trusts are used primarily to reduce estate tax liabilities on gifts to family members. Community Foundations exist to serve the philanthropic wishes of a community's donors, and to enhance the quality of life of a community. Donors may choose to support the community with unrestricted gifts, or to create their own donor-advised fund, which are like private foundations but allow donors to avoid all the legal and administrative responsibilities and costs of managing a private foundation. Program Related Investments are for donors who prefer to use their charitable capital to make loans, loan guarantees, and equity investments rather than grants.
Charities can sometimes raise needed funds more readily by loans rather than gifts.
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