PassionFunds Companion To Private Foundation

PassionFunds as a Companion to Your Private Foundation


Assets of a private foundation may be used as a qualified distribution to establish a community foundation PassionFund, such as a donor-advised fund, field of interest fund, scholarship fund or designated fund.  Depending on the type of fund established, the private foundation's board of directors often stays involved in setting grant-making priorities, advising on grant awards and assessing grant success.

A companion PassionFund with the community foundation can complement your private foundation in several important ways.



PassionFunds can provide anonymity in grant making.  Private foundations must disclose their grant making on their tax filing, IRS Form 990, and this information is searchable online, e.g. Guidestar and Foundation Center Library. The United Way – Community Foundation IRS filing does not identify the source of particular grants, which affords the donor a level of privacy that a private foundation cannot provide.


Expansion of Mission

A PassionFund can make grants that fall outside of the stated goals of the private foundation so mission conflict is avoided. For private foundations that have a specific mission focus, such as education initiatives, a grant to fund a cancer unit at a local hospital may be inconsistent with the mission but still of interest to the principals of the foundation.


Flexibility of 5% Annual Payout

Private foundations are required to distribute a minimum of 5% of the foundation’s assets annually.

On occasion this may be challenging for the private foundation.

Private foundations may use a companion

Donor Advised Fund

to meet their 5% payout requirement. Donor-advised funds provide greater flexibility of the separation of timing of the contributions to the fund and when and how much is granted to charities as recommended by representatives of the private foundation over time.

It is generally recommended the funds contributed to the donor-advised fund from the private foundation are granted to qualified charities in a relatively short period of time, e.g. 1-2 years.


Multi-Generational Participation in Philanthropy

Private foundations often include family on staff and on the governing board to work together to build philanthropy and create a legacy of family giving. Challenges can occur as successive generations develop their own individual charitable interest but for purposes different from the private foundation’s defined mission or geographic focus. Donor advised funds provide the family members an opportunity to work together and contribute to the causes most meaningful to them.


Specialized Services to Private Foundations

The community foundation provides assistance for complex grant making such as endowments, naming rights, matching grants, challenge grants, grant monitoring and reporting.