Generally, it is possible for a private foundation with $5 million in assets, or the potential to reach $5 million in the future, to become a supporting organization of a community foundation. Besides easing the administrative and cost burdens of managing a private foundation, transferring it to The Denver Foundation permits the private foundation to take advantage of many aspects of our public charity status.
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Section 507 of the Internal Revenue Code permits termination of a private foundation in either trust or corporate form with distribution of its assets to a public charity. The two primary requirements for the termination of a private foundation are that the private foundation must distribute all of its net assets to one or more tax-exempt organizations and that each organization has been in existence for a continuous period of at least five years preceding the distribution. The Denver Foundation fulfills both of these requirements and the private foundation's assets typically form a permanent Donor Advised Fund under a similar name.
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We are glad to help you and your client explore this option in more detail. Please contact us for more information or to set up a meeting. Remember, there is never an obligation and all conversations are kept confidential. |
