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Special Situations

The following are charitable giving options your client may want to consider in some special situations including transfer of a private foundation and ownership of a closely held business, as well as information relevant to corporate clients.

Transferring a Private Foundation:

As charitable donors, your clients may wish to create a vehicle that allows them to maintain long-term involvement with charitable assets. A private foundation can be an attractive giving vehicle for a person in the right circumstances. However, the disadvantages of private foundations, including costs, administration, and lesser tax benefits, cause many people to seek a better alternative. While some donors may find a private foundation suited to their needs, the alternative of establishing a fund at The Community Foundation of Middle Tennessee often proves more attractive. Private foundations can transfer assets to establish a permanent, named fund or supporting organization of The Community Foundation of Middle Tennessee. In either case, the private foundation's name and philanthropic goals can be retained. No tax or penalty is assessed on such transfers. We invite you to discuss with us ways in which we can help your private foundation clients achieve their charitable purposes and avoid burdens and limitations associated with the maintenance of a private foundation.

For a quick comparison of a fund with The Community Foundation and a private foundation, refer to the Professional Advisor Toolkit.

When Your Client Owns a Closely Held Business:

Owners of a closely held or family business are often very involved in the community and in charitable giving. A partnership with The Community Foundation of Middle Tennessee, a public charity, is a cost-effective method to maximize and target charitable involvement while minimizing tax liability.

The Foundation can be of particular assistance under the following circumstances:

  • Passing ownership of the company to children or others

  • Selling the company and minimizing taxes

  • Getting equity out of the company to provide income for the donor and others

  • Facing taxation on excess retained earnings

When Your Client is a Corporation:

Corporations are often inundated with requests for contributions, which may result in an unfocused program of corporate giving. The donations a corporation makes may depend on the executive contacted by a particular charity and, therefore, may vary from year to year. Some corporations may be unsure of the charitable dollars they will have available. In addition, a corporation may wish to focus on a particular community problem, but may find prohibitive the cost of the necessary administrative time and effort.

The Community Foundation can help simplify the charitable giving process. For more information, see Corporate Giving.