Benefits of Public Charity

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 Community Foundation fulfills both of these requirements and the private foundation's assets typically form a permanent donor advised fund under a similar name. The supporting organization option requires careful consideration by your client and our board of directors.