From a private foundation to a donor-advised fund: A five-point checklist

Many families established private foundations because they wanted to make a lasting difference in the Atchison community and beyond. Those foundations have supported important causes, brought family members together through charitable giving, and created meaningful legacies.

Over time, however, circumstances can change. Children and grandchildren may live in different parts of the country. Board meetings become harder to schedule. Administrative responsibilities grow. Tax filings, investment oversight, recordkeeping, and compliance with complex rules can begin to feel like more work than anyone anticipated.

For many families, that is when it becomes worthwhile to ask an important question: “Would a donor-advised fund at the Atchison Foundation better serve our charitable goals?”

There is no one-size-fits-all answer. If your family is beginning to explore the possibility, these five steps can help guide conversations with family members and professional advisors.

1. Be realistic about what’s working—and what’s not.

Begin with an honest look at how well your private foundation is working today. Is it still helping your family accomplish what you hoped it would? Are family members actively engaged, or has most of the responsibility fallen to just one or two people?

Sometimes the answer is not that the private foundation has failed. It may simply be that your family’s circumstances and needs have evolved.

2. Consult the specialists.

Talk with your attorney, CPA, and financial advisors. Transitioning from a private foundation to a donor-advised fund involves important legal, tax, and financial considerations. Your advisors can help you evaluate the available options and key factors, determine whether a transition is appropriate, and develop a plan suited to your family’s circumstances.

The Atchison Foundation should be part of the conversation, even in the early stages. We welcome the opportunity to work alongside you and your advisors. Our team can explain how a donor-advised fund works, answer questions about the transition, and help preserve the identity and charitable purpose your family has built over the years.

In many cases, a donor-advised fund can continue under a familiar family or foundation name, allowing your charitable legacy to live on in a meaningful way.

3. Identify the decision-makers.

As you consider a transition, our team can help you determine who should serve as advisors to the new fund. One of the strengths of a donor-advised fund is its flexibility. You may name family members to recommend grants today and designate successor advisors to involve future generations in your family’s philanthropy.

In many ways, the advisors to a donor-advised fund can carry forward the role previously filled by a private foundation’s board of directors—without many of the accompanying administrative responsibilities.

4. Move to implementation.

If your family decides to move forward, the transition can often be handled efficiently, although careful planning is essential. Generally, the private foundation distributes its remaining assets to the Atchison Foundation to establish or add to a donor-advised fund, after reserving sufficient funds for final accounting, legal, tax-preparation, and other closing expenses.

Your professional advisors can then help complete the foundation’s final tax return and any required state filings, while our team assists with establishing the new fund.

5. Carry on with your good work.

Once the transition is complete, your family can continue supporting the organizations and causes that matter most to you—often with significantly less administrative responsibility. Instead of spending time on compliance and paperwork, you can devote more energy to what inspired the foundation in the first place: making a difference.

Every family’s situation is unique, and moving from a private foundation to a donor-advised fund is an important decision. If you are wondering whether it might be the right fit for your family, the Atchison Foundation would be delighted to visit with you and your advisors.

We are here to help you evaluate your options, simplify your giving, and continue building the charitable legacy your family has worked so hard to create.