Establishing a Supporting Organization at
The San Diego Foundation

1. Board Makeup
To qualify as a supporting organization under Section 509(a)(3) of the Internal Revenue Code, more than 50 percent of the board members must be selected by The San Diego Foundation Board. (Thus, if the three existing trustees of a private foundation wished to serve as board members of the supporting organization, four additional members would be selected by The San Diego Foundation Board of Governors.) Donor members often submit recommendations for review and approval by Foundation-appointed members.

2. Minimum gift size
Because a separate investment portfolio is maintained for a supporting organization, a minimum gift of $1 million is required. This enables the investment manager to provide a diversified portfolio at a reasonable cost. Additionally, because the administrative costs associated with a supporting organization are above those of a donor advised fund, maintaining a balance of $1 million assures that costs, as a percentage of the corpus, are within a reasonable range.

3. Successor advisors
A supporting organization associated with The San Diego Foundation allows two generations to serve as advisors - the donors and their children or others they may name. Donors also may specify how assets are to be used after the role of the advisor ends.