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Supporting Foundation Option

Supporting Foundation Option

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 to a community foundation permits the private foundation to take advantage of many aspects of our public charity status.

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 of 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.  TTCF 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.  For further information, please contact us at 530-587-1776.