Private Operating Foundations

Operating foundations are private foundations that use the bulk of their income to provide charitable services or to run charitable programs of their own. They make few, if any, grants to outside organizations. To qualify as an operating foundation, specific rules, in addition to the applicable rules for private foundations, must be followed.

Below is everything on our site for private operating foundations. You can use the filtering options on the right to narrow these results.

Developed by the Treasury Guidelines Working Group of Charitable Sector Organizations and Advisors

Since the November 7, 2002 publication by the United States Department of the Treasury of its “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities,”1 grantmakers have grappled with the problem of how to comply with their legal obligations under Executive Order 13224, the USA Patriot Act, and other laws and regulations that prohibit financial transactions with terrorists and their supporters.2 The Treasury Guidelines map out one route to compliance, but both grantmakers and operating charities have criticized them for failing

A plain-language guide to Executive Order 13224, the Patriot Act, embargoes and sanctions, IRS rules, Treasury Department voluntary guidelines, and USAID requirements.

In the wake of the September 11, 2001, terrorist attacks, grantmakers are now being asked for a substantially higher level of due diligence regarding grantees than ever before. The good news is that providers of computer-based products and services are being responsive and beginning to offer grantmakers some practical and cost-effective solutions.

This list highlights some of the ways that private foundations and public charities (including community foundations) may engage in public policy without lobbying. Public charities have further flexibility and may engage in lobbying activities not described below.

1.Direct communications with legislators or their staff about a general issue of concern. To use this lobbying exception these direct communications may not either refer to specific legislation or legislative proposal, or if specific legislation or proposal is referenced, no view may be expressed on such legislation.  

IRS response to Council inquiry regarding private foundations engaging in advocacy and lobbying.

IRS document outlining lobbying issues of tax-exempt organizations.

Sabbaticals are not too uncommon in the nonprofit world for foundation executives or senior management. It can be a useful time to reflect on past accomplishments, revitalize, and gain renewed inspiration for future work. Sabbaticals for board members likewise can have similar positive effects but should be approached with care.

When to Think Twice

Sample conflict of interest policies for staff and board members.

Sample conflict of interest policies from the Community Foundation of Switzerland County and Triangle Community Foundation.

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