In an effort to simplify their grantmaking processes, many private foundations state they only give grants to 501(c)(3) organizations. Yet, not all 501(c)(3) organizations have the same grantmaking requirements. Two types of 501(c)(3) organizations require special attention: supporting organizations and private foundations. If additional requirements are not fulfilled, penalty taxes will be incurred.
This article highlights what you should know as a foundation manager. It walks you through the step-by-step process of identifying an organization’s specific tax status so you can fulfill the requirements associated with each type of organization.
This article is written for private foundations. Grantmakers that are not private foundations have different concerns: for example, individual donors may have considerations around the charitable contribution’s deductibility and public charity grantors (e.g., community foundations, public foundations, donor advised funds) have fewer regulations than private foundation grantors.
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