How to Start a Private Foundation - Exponent Philanthropy

How to Start a Private Foundation

Do you want to learn how to start a private foundation? Private foundations can provide significant benefits to individuals, families, and companies, if operated correctly. They also provide tax benefits to taxpayers and enable them to build a long-lasting tradition of charitable giving.

Generally, a Private Foundation Has 4 Characteristics:

  1. It is a charitable organization;
  2. It is initially funded from one source (usually an individual, a married couple, a family or a business);
  3. Its ongoing income derives from investments (in the nature of an endowment fund); and
  4. It makes grants to other charitable organizations rather than operating its own program (except in the case of a private operating foundation).

This Primer Will Help You:

  • Educate yourself about various charitable vehicles.
  • Determine the type of private foundation.
  • Structure the foundation.
  • Establish your foundation with the state.
  • Obtain an Employer Identification Number.
  • Apply for tax-exempt status with Federal and State governments.
  • Operate the private foundation in accordance with the law.

Whatever your situation, this primer offers valuable information about advantages and disadvantages of starting a private foundation and when to seek legal and professional assistance during the process.


How to Start a Private Foundation Table of Contents

l. EDUCATE YOURSELF ABOUT VARIOUS CHARITABLE VEHICLES

ll. DETERMINE THE TYPE OF PRIVATE FOUNDATION

lll. STRUCTURE THE FOUNDATION AS EITHER A CHARITABLE TRUST OR A NONPROFIT CORPORATION

lV. ESTABLISH YOUR FOUNDATION WITH THE STATE

V. OBTAIN AN EMPLOYER IDENTIFICATION NUMBER

Vl. APPLY TO THE IRS FOR TAX-EXEMPT STATUS

Vll. REGISTER AND APPLY FOR EXEMPTION WITH THE STATE

Vlll. OPERATE YOUR PRIVATE FOUNDATION ACCORDING TO THE LAWS

lX. CONCLUSION

20 pages