Private Foundations: Tax Law and Compliance, 4th Edition

Chapter OneIntroduction to Private Foundations

1. § 1.1 Private Foundations: Unique Organizations
2. § 1.2 Definition of Private Foundation
3. § 1.3 History and Background
4. § 1.4 Private Foundation Law Primer
   1. (a) Introduction
   2. (b) General Operational Requirements
   3. (c) Disqualified Persons
   4. (d) Self-Dealing Rules
   5. (e) Mandatory Payout Rules
   6. (f) Excess Business Holdings Rules
   7. (g) Jeopardizing Investments Rules
   8. (h) Taxable Expenditures Rules
   9. (i) Tax on Investment Income
   10. (j) Termination of Private Foundation Status
   11. (k) Record-Keeping and Grant-Making Suggestions
   12. (l) Charitable Giving Rules
   13. (m) Unrelated Business Rules
5. § 1.5 Statistical Profile
6. § 1.6 Foundations in Overall Exempt Organizations Context
7. § 1.7 Definition of Charity
8. § 1.8 Operating for Charitable Purposes
9. § 1.9 Organizational Rules
10. § 1.10 Private Foundation Sanctions

§ 1.1 Private Foundations: Unique Organizations

There are millions of tax-exempt charitable organizations in the United States, yet only about 90,000 of them are classified, for federal tax purposes, as private foundations. This fact alone—this isolation of foundations purely for purposes of government regulation—makes private foundations unique.

The federal tax law segregates private foundations from other charitable entities, these other entities being generically referred to as public charities. Congress differentiated private foundations from other charities in 1969, and in so doing triggered a chain of reactions and developments in the tax law that shows no sign ...