Private foundations are charities that ordinarily rely for their support on a single company, family, or individual. Most private foundations serve their charitable purposes by making grants rather than conducting their own direct charitable operations. They are governed by stricter legal rules than public charities, and they often face difficult and highly technical legal compliance issues. Our lawyers help private foundations to navigate these regulatory complexities. We help founders, board members, and foundation staff to learn the rules so that they can focus their energies on philanthropy and avoid colliding with legal obstacles.
Areas of Focus
- Forming and securing tax exemption for foundations.
- Issues arising from grants to non-traditional grantees, e.g., a project of an organization that is not a U.S. public charity, or complex projects where further funding depends on specific benchmarks.
- Structuring transactions to avoid both direct and indirect self-dealing.
- Negotiating, documenting, and opining on program-related investments.
- Qualifying as a private operating foundation or a private pass-through foundation in order to benefit the community while generating maximum tax benefits for donors.
- Advocacy grantmaking.
- Qualifying distributions.
- Grants to individuals.
We also help companies develop effective legal structures for their community benefit activities, often including a company foundation.
Related Blog Posts (69)
November 11, 2020
Authors
David A. Levitt
Catherine Chang
Related Publications (2)
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February 2018
Lobbying Overview for Private Foundations
Private foundations’ expenditures for legislative lobbying are prohibited as “taxable expenditures” by Section 4945 of the Internal Revenue Code. For the purpose of deciding what is prohibited lobbying, private foundations may rely on the definitions found in Sections 501(h) and 4911 of the Internal Revenue Code, which define lobbying for those public charities that have…Author
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August 2012 (Journal of Taxation)
Proposed Regulations Would Bring Program-Related Investments into the 21st Century
After decades in which the existing Regulations remained unchanged, Treasury and the IRS have responded to suggestions by the tax and private foundation communities and have issued updated guidance for special types of investments that are related to a foundation's purpose. While not every suggestion was adopted and while some questions remain unanswered, the overall…Authors
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Related Upcoming Events
Virtual Conference June 22, 2023
2023 AICPA & CIMA Private Foundation Summit - Session: "A Historical Look at Private Foundations and Partnership Investments"
This session will provide a historical look at partnerships investments, beginning with Plumsted Theater and moving through recent court cases and the current IRS work plan to gain a perspective on where we have been, where we are today, where there is clear guidance, where additional guidance is needed, and where private foundation are needing to document their filing positions.
10:40 a.m. – 11:30 a.m. PT
Co-Panelists: Jane Searing, CPA | Nancy McGlamery, J.D.
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Past Events
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In-Person Conference May 5, 2023
American Bar Association, Section of Taxation, 2023 May Meeting, E.O. Committee - Session: “New Kid on the Block: Purpose Trusts"
2:45 p.m. – 4:00 p.m. ET at the University of DC & Catholic University, Level M1 | Exempt Organizations PM Session 9
Patagonia has been in the news for using a purpose trust and a 501(c)(4) to accomplish the founder’s
philanthropic goals. What exactly is a purpose trust? How does this structure work, and what are its advantages and disadvantages? Is this trending? What are the implications for using private foundations?Moderator: Robert Wexler, Adler & Colvin
Panelist: Susan Gary, University of OregonChair: Rosemary E. Fei, Adler & Colvin
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In-Person Conference January 19, 2023
The University of Texas School of Law’s 40th Annual Nonprofit Organizations Institute Conference - Session: "A View of the Sector"
Explore the latest in policy and regulation from the US Government in an effort to answer the question: What just happened? You’ll be the first to know about topics like donor-advised fund regulations, end-of-year legislation, and what is Congress likely to do next? What about those expiring incentives for charitable giving, will they be renewed? Meanwhile, the Supreme Court continues to unwind the regulatory powers of the executive branch.
8:30 a.m. – 9:30 a.m. CT
Co-Presenter: Alex Reid, Baker & Hostetler LLP
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Virtual Conference December 13, 2022
AICPA & CIMA Private Foundation Summit - Session: Increasing the Tools in the Charitable Toolbox to Accomplish Your Charitable Mission
Increasing the Tools in the Charitable Toolbox to Accomplish Your Charitable Mission | 12:55 p.m. – 2:10 p.m.
Co-presenters: Jane Searing, Deloitte Tax LLP | Nancy McGlamery, Adler & Colvin
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In-Person Conference October 20-21, 2022
"Ask an Expert" at the National Center for Family Philanthropy’s 2022 National Forum on Family Philanthropy
“Ask an Expert” is an opportunity for forum attendees to meet one-on-one with a legal professional to discuss and gain valuable insight on issues pertinent to the management of their organization(s). Ms. Nancy E. McGlamery, Principal at Adler & Colvin, will be available for individual “Ask an Expert” sessions on Thursday, 10/20, and Friday, 10/21 at the National Forum. Register for the “Ask an Expert” meeting (20 mins) – attendance is limited. Please note that Ms. McGlamery can help you understand the laws, but cannot provide legal advice for specific situations.
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Virtual Conference August 16-17, 2022
Moss Adams Private Foundation Virtual Conference - Economic Update Session: “Economic Update and Minimum Distribution Requirements for Private Foundations”
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Webinar July 12, 2018
Strafford - Form 4720 Private Foundation Excise Tax Return: Reporting Taxable Violations
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Panel May 14, 2018
Mission Investors Exchange 2018 National Conference: Mission Forward! “Introduction to Impact Investing: A 101 for Beginners”
Co-panelist: Eric Stephenson, Cordes Foundation
Co-panelist: Rehana Nathoo, Case Foundation
Chicago, IL
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Seminar March 27, 2018
Grant Thornton, LLP - “What’s New in Not-for-Profit Law?”
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Related Memos
Private Foundations - What You Need to Know
The most common manner in which individuals make charitable contributions is by making gifts or bequests outright to institutions and causes important to the donor. An alternative is to establish a charitable vehicle to receive the donor’s assets in one or more lump-sum payments, and then make grants/distributions to operating charities over time. As all of the interests in such an entity are dedicated to charity, they are eligible to receive tax exemption from the Internal Revenue Service and the California Franchise Tax Board.
Rules of the Road; A Guide to the Law of Charities in the United States, Second Edition, Chapter 4, Council on Foundations, 2008
This summary of the tax rules for private foundations will be published shortly by the Council on Foundations as Chapter 4 of The Rules of the Road: A Guide to the Law of Charities in the United States, by Betsy Buchalter Adler, Ingrid Mittermaier, and David Levitt.
