Private Foundations: Tax Law and Compliance, 4th Edition

Chapter ThreeTypes of Private Foundations

1. § 3.1 Private Operating Foundations
   1. (a) Direct Charitable Distributions
   2. (b) Grants to Other Organizations
   3. (c) Individual Grant Programs
   4. (d) Income Test
   5. (e) Asset, Endowment, or Support Test
   6. (f) Compliance Period
   7. (g) Advantages and Disadvantages of Private Operating Foundations
   8. (h) Conversion to or from Private Operating Foundation Status
   9. (i) Exempt Operating Foundations
2. § 3.2 Conduit Foundations
3. § 3.3 Common Fund Foundations
4. § 3.4 Research and Experimentation Funds
5. § 3.5 Other Types of Foundations
6. § 3.6 Nonexempt Charitable Trusts
7. § 3.7 Split-Interest Trusts
8. § 3.8 Foreign Private Foundations

The federal tax law definition of the term private foundation embraces all charitable entities other than those that are classified as public charities.¹ Although the “standard” private foundation is the most predominant, there are several other varieties of foundations. Moreover, certain nonexempt trusts and foreign entities are subject to some or all of the private foundation rules.

§ 3.1 Private Operating Foundations

Private operating foundations have long been recognized as nonpublicly supported organizations that devote most of their earnings and much of their assets directly to the conduct of their tax-exempt purposes. This special type of foundation is essentially a blend of a private foundation and a public charitable organization. A private operating foundation is a charitable organization that makes qualifying distributions directly ...