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Private Foundations
Private foundations are generally founded by:- an individual
- a family
- a group of individuals
They are organized either as nonprofit corporations or charitable trusts. Typically, the donor or donors who establish a private foundation make a gift of cash or other assets that establish the initial "endowment." The foundation invests the endowment and the governing board makes grants available to charities using the income earned from the investment.
Since a private foundation is a charitable organization, it is exempt from federal income tax on its income, although it must pay a one to two percent excise tax on its net investment income.
Materials
- Benefits of Private Foundations
A number of benefits, both personal and social, make private foundations an important investment in the future. - Types of Private Foundations
Learn more about the three main types of private foundations.
Links
- Starting a Private Foundation
What factors and options should you consider when starting a private foundation? Explore resources from the Council on Foundations. - Life Cycle of a Private Foundation
Learn more about the interactions between the Internal Revenue Service and private foundations from filing an application for recognition of tax-exempt status to making changes in mission and purpose. - Association of Small Foundations
Resources to determine whether you want to establish a public charity or a private foundation.
