Private Foundations

Private foundations make grants based on charitable endowments. The endowment funds come from one or a small handful of sources -- an individual, a family or a corporation. Because of their endowments, they are focused primarily on grantmaking and generally do not raise funds or seek public financial support the way public charities (like community foundations) must.

“Private foundation” is the umbrella term that includes corporate, independent, family, and operating foundations.  As of 2011, there were 73,764 private foundations in the United States (Foundation Center, 2011).  

In 2011, private foundations held more than $604 billion in assets and gave away more than $45 billion (Foundation Center, 2011).  

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

Note to the Program Officer

The scope of the program officer job description has evolved. Where it was once primarily tactical—reviewing funding requests and developing requests for proposals—the program officer’s role more commonly includes strategic activities. Program officers must master three distinct areas: (1) developing and strengthening internal networksand relationships, (2) creating the foundation/giving program’s grantmaking strategy,and (3) engaging grantees and the community.

One of the greatest challenges encountered in thinking about evaluation is that there usually is more than one acceptable way to evaluate a given grant, project, or program.

The form that an evaluation takes and the products that it yields will depend on choices made about the following issues:

Question: A potential grantee submitted to us an IRS letter of determination that expired on August 30, 2008. The grantee said that, despite the expiration date, the letter of determination is treated as the grantee's permanent ruling. Is this true?
 

What is the five percent payout requirement?

Each year, every private foundation must make eligible charitable expenditures that equal or exceed approximately five percent of the value of its endowment. The purpose behind the minimum payout requirement contained in Internal Revenue Code Section 4942 is to prevent foundations from simply receiving gifts, investing the assets, and never spending any funds on charitable purposes. The basic rule can be stated simply, but its calculation is complex.

Both the board and CEO advance each foundation’s mission. They hold different responsibilities, but they need to support and balance each other.

The Council on Foundations’ Foundation Management Series provides foundation boards and staff with the tools needed to benchmark their practices and operations against peers in the field. Containing data from the Council’s 2009 Foundation Management survey, the series consists of three reports: Board Composition and Compensation, Administrative and Investment Expenses, and Fiscal Oversight.

Board Composition and Compensation

Board Composition and Compensation offers findings on foundation policies regarding board compensation and diversity.

U.S. private foundations are increasingly involved in international grantmaking. One way for a private foundation to give overseas is to make grants directly to foreign charities. Many U.S. private foundations, however, may want to consider giving overseas indirectly through a "Friends of" organization.

The Council on Foundations defines “international grantmaking” to include grants made by U.S. foundations and corporations to overseas recipients as well as grants made to U.S.-based organizations operating international programs. This includes grants made toward activities wholly within the Unites States that have significant international purpose and impact.

U.S. foundations and corporations interested in international grantmaking have several options:

The Pension Protection Act of 2006 (PPA) has introduced filing requirements for split-interest trusts such as charitable remainder trusts and pooled income funds.

Which returns are affected?

These requirements apply to returns for taxable years beginning after December 31, 2006.

Under the Pension Protection Act of 2006 (PPA), the rules for public disclosure of the Form 990-T by public charities and private foundations became identical to those for Form 990.

Which forms are affected?

Any Form 990-T filed after August 17, 2006.