One of the first considerations when supporting a client’s charitable goals as part of their estate or financial plan is structure. Donor advised funds and private foundations are both valuable tools for giving, but the right fit depends on the client’s unique vision for impact. 

To help guide these conversations, we’re addressing three common myths about the differences between donor advised funds and private foundations. 

Myth #1: Donor advised funds are one-size-fits-all, and only private foundations offer customization 

While private foundations provide flexibility around governance and operations, donor advised funds are far from rigid. At the Community Foundation of Greater Flint, a donor advised fund is not a product—it’s a relationship-based structure that reflects the goals and values of the donor. 

Here’s why many advisors and donors find donor advised funds to be highly adaptable: 

  • A donor advised fund allows your client to make a charitable gift that is immediately eligible for a tax deduction. The client can then recommend grants over time, at their own pace.
  • A donor advised fund at the Community Foundation offers more than transactional giving. Donors become part of a local network of changemakers, with access to staff who understand Genesee County’s evolving needs and the organizations leading solutions.
  • The Community Foundation partners with donors and advisors to build long-term giving plans, including multi-generational philanthropy, strategic grantmaking, and opportunities to learn about local impact. 

Myth #2: The decision comes down to size 

Size is often assumed to be the determining factor—but that’s rarely the case. While both donor advised funds and private foundations can hold significant assets, the key distinctions relate to cost, complexity, flexibility, and privacy. 

Donor advised funds offer: 

  • Lower administrative burden and setup costs
  • Higher charitable deduction limits
  • Fair market value deductions for gifts of complex assets
  • No excise taxes or required distributions
  • The ability to grant anonymously 

Ultimately, the decision between a donor advised fund, a private foundation, or both comes down to what best supports your client’s values, goals, and desired level of involvement—not the size of the gift. 

Myth #3: It’s either/or—you must choose one 

In some cases, a combined approach is most effective. Clients who already have a private foundation may choose to open a donor advised fund for added flexibility or to handle specific types of gifts. Some foundations even transfer their assets to a donor advised fund to continue their mission with less administrative complexity. 

Here are a few reasons why clients use both: 

  • Anonymity: Donor advised funds can make grants anonymously—something not typically available with a private foundation.
  • Tax benefits: Certain assets, such as closely held business interests or real estate, may receive more favorable tax treatment when contributed to a donor advised fund.
  • Strategic flexibility: Using both vehicles can support diversified giving strategies that remain responsive—even in uncertain markets. 

We also see families turning to donor advised funds when the operational demands of a private foundation begin to outweigh its benefits. The Community Foundation of Greater Flint helps make this transition seamless, ensuring the donor’s legacy continues—with less complexity and more personalized support. 

We’re here to support you and your clients 

At the Community Foundation of Greater Flint, we’re committed to partnering with advisors and their clients to create meaningful, lasting impact. Whether your client is just beginning to explore charitable giving or is managing an established foundation, our team is ready to help craft a strategy that reflects both their financial goals and their vision for community change. 

Let’s talk about what’s possible—together.