It receives its public charity status because of its affiliation and common purpose to the community foundation. Another option is an Acorn Fund. All contributions are accumulated until the donor's goal for the fund is realized. Once a fund is established, any amount may be added as a gift, memorial or bequest. The Foundation staff will acknowledge all gifts and provide appropriate tax receipts.
All gifts are tax deductible.
Because the legal apparatus is already in place, community foundations have appropriate forms available so that a fund can be established and the tax advantages obtained quickly and easily. The federal tax code provides significant incentives for contributions to a community foundation. There is also a significant benefit in the deductibility of gifts of certain appreciated assets. The donor can deduct the full-appreciated value and avoids capital gains taxes. The Foundation's professional staff and voluntary community board of directors provide careful administration.