Private Foundations

Private foundations use a single source of funding from which to make grants, usually from an individual, family or a business. The foundation will invest the majority of the endowment, earning dividends and interest on its investments. The IRS requires private foundations to make grants equal to at least five percent of its investment assets each year and pay a two percent excise tax on net investment earnings.

Private foundations are concerned with making a difference in the community or around a particular issue. They typically have guidelines that will let the public know what they are attempting to accomplish through their grantmaking. While the guidelines are very helpful in learning about a foundation’s interests and priorities, it is also very important to carefully examine a foundation’s grants list, which is part of their annual IRS Form 990 PF filing. This information is readily accessible for free with Guidestar.

Private foundations range in size from very large foundations that give away nearly $100 million a year, such as The McKnight Foundation , to mid-size foundations like The Blandin Foundation whose annual giving is approximately $18 million. Finally, they can also be smaller family foundations, such as Patrick and Aimee Butler Family Foundation whose total annual giving is about $3 million. The very large, mid-sized and even small foundations generally have staff that review proposals and make recommendations to their trustees.


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