Some of your clients who have an existing private foundation may be interested in the benefits of transferring it to the Community Foundation. Through a simple transfer process, your client may be able to avoid some of the hassles and costs of private foundation management.
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. Our Community Foundation fulfills both of these requirements and the private foundation's assets are typically used to establish a permanent donor-advised fund under a similar name.