The Foundation Center defines a private foundation as a nongovernmental, nonprofit organization having a principal fund managed by its own trustees or directors. Private foundations maintain or aid charitable, educational, religious, or other activities serving the public good, primarily through the making of
grants to other nonprofit organizations.
To understand what a private foundation is, it helps to understand what it is not. Every U.S. and foreign charity that qualifies under Section 501(c)(3) of the Internal Revenue Service Code as tax-exempt is a "private foundation" unless it demonstrates to the IRS that it falls into
another category. Broadly speaking, organizations that are not private foundations are public charities as described in Section 509(a) of the Internal Revenue Service Code.
Another difference between private foundations and public charities is that public charities generally derive their funding or support primarily from the general public, receiving grants from individuals, government, and private foundations. Although some public charities engage in grantmaking activities, most conduct direct service or other tax-exempt activities. A private foundation, on the other hand, usually derives its principal fund from a single source, such as an individual,
family, or corporation, and more often than not is a grantmaker. A private foundation does not solicit funds from the public.
Not every organization that uses the word "foundation" in its name is a private foundation, and the word "foundation" has no legal meaning in and of itself. Instead you must look at how the IRS designates an organization and inquire as to whether they file a Form 990-PF (the annual information return filed by private foundations) or a Form 990 (the annual information return filed by public charities and other nonprofit organizations).
The Foundation Center's web site maintains a historical collection of Forms 990-PF, since it is recommended that you look at several years worth of returns to identify the giving trends of a particular foundation. This historical collection dates back three to four years, depending on the foundation. Returns older than three to four years are sent to our archive. Forms 990-PF and 990 are available through the 990 Finder on the Foundation Center's web site.
There are several sources to help you determine whether an organization is a public charity or a private foundation.
- You can refer to the Internal Revenue Service's Publication 78: Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986.
- The Foundation Center's 990 Finder can be used to search for Forms 990-PF and Forms 990.
- GuideStar is an Internet directory of nearly one million nonprofit organizations and posts both Forms 990-PF and 990 to its web site.
- Tax Analysts of Arlington, Virginia, provides a database of tax-exempt organizations. Access to the Tax Analysts database is available at Foundation Center libraries.
- The Center's Foundation Finder, a free look-up tool that covers more than 90,000 institutions, can be used to search U.S. private foundations, community foundations, grantmaking public charities, and corporate giving programs (for this last group, only a brief profile is provided, as the tax returns of corporations are not required to be made public).
To locate complete information about these types of grantmaking institutions, please refer to the Foundation Directory Online. Free access to the Foundation Directory Online is available at all five Foundation Center libraries and Cooperating Collections.
To learn more about the basics of foundation funding, see Learn About Foundations and Fundraising, or attend Grantseeking Basics, the Center's free one-hour class.
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