Options for Managing the 5% Asset Payout

Sometimes it’s a challenge for your clients to meet the annual 5% payout requirement of their private foundation. We can help.

There are two options for simplifying the 5% payout requirement.

Opening a Donor Advised Fund

Your clients can establish and name a donor advised fund at the Foundation, and place all or part of the required payout in the fund. Because your clients' contribution to their fund is a “qualifying distribution,” it counts toward the 5% payout.

Your clients' private foundation can make just one grant, and issue just one check, each year.

When they establish a donor advised fund with us, your clients enjoy all the benefits offered to our fundholders.

Making One Grant a Year to an Established Fund

Another way to simplify the process for your private foundation clients is to supporting regional initiatives or unrestricted grantmaking with their annual 5% payout.

Your clients' private foundation can meet all or part of its 5% annual payout with grants to existing funds at the Foundation or by supporting our community initiatives or unrestricted grantmaking.

Your clients' support will make a difference in their own backyard by helping to:

Close the achievement gap in local urban schools to give low-income children a better chance to reach their potential

Increase affordable housing so young adults, mid-wage employees and seniors can remain in the county

Provide low-wage, single adults with education, training and skills they need to move up to better-paying careers

Ensure local nonprofits have access to training in best practices and resources for fiscal management so they can operate at maximum efficiency and improve their sustainability

Contact Us to Get Started

To learn more about simplifying the 5% payout requirement for private foundations and other solutions for your clients, contact Juanita T. James, President & CEO, at 203.750.3200.