In December, Facebook founder Mark Zuckerberg gave $18 million in Facebook stock to the Silicon Valley Community Foundation as part of his pledge to give away 50% of his wealth in his lifetime or upon his death.
In an interesting blog post today, the Community Foundation of New Jersey (CFNJ) wrote about the possible reasons that Zuckerberg donated the money to a community foundation rather than setting up a private, family foundation like many people in his tax bracket do.
CFNJ Board Member Frederick Schoenbrodt talks about tax advantages that can be gained by working with a community foundation instead of a private foundation. But he says there are many other reasons Zuckerberg likely chose to work with a community foundation. Working with an established community foundation means avoiding the bureaucracy that comes along with setting up a brand new foundation and having talented local staff who understand community needs, Schoenbrodt says. Community Foundation donors can allow those staff members to allocate gifts to what they determine to be the community’s greatest needs, or they can donate to, or set up, a donor-advised fund that benefits a certain organization or cause that they care about.
“In [the case of donor-advised funds], the donor retains responsibility for the ‘fun part’ of philanthropy, i.e., recommending grants to organizations and purposes that further the donor’s philanthropic vision,” Schoenbrodt said, “while remaining completely free from the burdens and rules imposed upon private foundations by the IRS and various state laws regulating charities.”
Here at Centre Foundation, we help donors who, like Zuckerberg, are interested in using their resources to improve their community. We’re proud to work with thousands of donors, and to administer more than 300 funds. Those interested in creating their own legacy of philanthropy though a Centre Foundation fund should talk to their financial planner and/or contact Centre Foundation at 814-237-6229. And as Schoenbrodt points out, donors don’t have to be ultra-rich Facebook inventors to help their community through a partnership with their local community foundation.
Thanks to Mr. Zuckerberg for highlighting the importance of community foundations, and to Mr. Schoenbrodt for so adeptly describing some of community foundations’ biggest advantages.