Private Foundations are often set up to allow a founder’s legacy to continue for generations to come. However, a growing number of factors can affect this. 

The growing administrative burden – maintaining the charities registration, annual financial reporting in line with the new reporting standards, overseeing investments and distributing assets – along with the annual costs of running a foundation, can quickly erode a foundation’s capital, reducing the funds available for charitable distribution and affecting its ongoing sustainability in only a short period of time.

Placing funds in a Donor-Advised Gift Account with The Gift Trust is a practical and affordable alternative to forming or maintaining a separate Private Foundation.


Looking to establish a Private Foundation?

 

Placing funds in a Donor-Advised Gift Account avoids the lengthy and expensive process of establishing a new private foundation and registering it as a charity.

 

Already operate a trust or foundation?

 

Your trust can be wound down and assets can be transferred to a Donor-Advised Gift Account allowing the foundation’s charitable purposes to continue. This fund can also reflect your original foundation name.

The administration and ongoing compliance requirements involved in setting up a private charity can be onerous, and even risky. Setting up a gift account allows The Gift Trust to look after those requirements, and provide support that allows the donor to focus on what they really want to do with their gifts.
— Susan Barker, Lawyer and Charity Specialist


Comparison of Giving Vehicles

A Gift Trust Gift Account
Establish a Private Foundation
Direct cash donation
Start-up time
Immediate
1 to 3 months minimum
N/A
Start-up costs
None.
Require substantial setup costs (legal & personal time).
N/A
Practical minimum size
$5,000+
Substantial assets required. $1 million+
$5
Ongoing admin
All admin provided.
Manage assets, keep records, administer grants, file returns, maintain board minutes, etc.
Collate donation receipts at end of year
Annual admin fee
1 - 2% fee p.a
Depends on admin and staffing costs.
N/A – annual collection of gift receipts.
Responsability
The Gift Trust completes all reporting.
Private foundation board of trustees assumes full responsibility and risk.
N/A.
Tax-exempt status
Investment growth potential
Anonymity
Limited. Trustees publically named on the charities register.
Donation receipts require name
Leave a legacy
Tax free investment growth

Comparing giving vehicles?  Read more about the differences between our gift accounts in comparison to establishing a private foundation or direct giving

 

BENEFITS

Like your own foundation at a fraction of the cost

A Donor-Advised Gift Account with The Gift Trust can function in much the same way as a standalone foundation. Your fund has the same flexibility and appeal, but The Gift Trust takes care of all the ongoing regulation and compliance requirements on your behalf.

Economies of scale

Opening a Donor-Advised Gift Account allows you to benefit from The Gift Trust’s established processes and economies of scale. This reduces overheads and administration, and lets more of your funds go to what you want to support. It also relieves you from the increasing burden of compliance and due diligence.

Retain tax benefits

Any new funds that are introduced into this fund by a donor remain eligible for tax credits under The Gift Trust’s charitable and donee status. Depending on the size of the fund, these funds can also earn a return through investment.

 

 


Give anonymously

Unlike a foundation, where the founders are often trustees and usually have to be publicly named on the Charities Register, donations from your Donor-Advised Gift Account can be anonymous if you want. We can also act as a gatekeeper to filter correspondence from those seeking donations.

 

You stay in control

The donor adviser (often the founder or a nominated family member) can continue to enjoy the rewards of recommending grants to public charities whenever they like.

While legal control of your funds will move to The Gift Trust, The Gift Trust will follow your donation advice unless there is a specific difficulty in doing so. In that case, we will recommend alternative approaches.

Leave a legacy

As with private foundations, successors can also be named on your fund as Donor Advisers to ensure a legacy of giving. Alternatively the founder may wish to leave instructions on how The Gift Trust can continue to fulfill their mission after their death.

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Case Study: Winding down Orientation Aotearoa

 

Orientation Aotearoa had remaining funds to distribute, but were looking to wind down their work. The trustees transferred the remaining assets to The Gift Trust who now manages and distributes their remaining funds through a number of grant and scholarship rounds, in line with agreed upon selection criteria.

“It was such an 'organic' ending to Orientation Aotearoa and it prevented us 'derailing' over money questions, as to what should happen with this remaining financial resource. It was most helpful.” –Doris, Trustee of Orientation Aotearoa


Interested?

Read more about how our Donor-Advised Gift Accounts work or contact us using the form below to talk about your options.

A Gift Account is easy to set up and can often be opened in 24 hours.


A simple and effective means for families to have organised giving without the costs and administration of a foundation.
— Joanne McCrae, Private Partner at Deloitte
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