is a legal entity that is established as a nonprofit corporation or a charitable trust for
the purpose of making grants to unrelated organizations or institutions, or to individuals for
scientific, educational, cultural, religious, or other charitable purposes. (Unrelated means that they
can only give to organizations that are not in any way connected to the grant-giving foundation. It
they were to give to related organizations, this would constitute self-dealing and disqualify them
from their foundation status). The definition above is a very broad IRS definition that covers
private foundations and public foundations.
Private Foundations and Public Foundations
So what's the difference between a private foundation and a public foundation? Private
foundations are of most interest to you when you seek financial support. Most of its funds will
come from a single source—most often an individual, a corporation, or a family. A
, this is actually another term for a public charity, gets its assets from multiple sources
which can include private foundations, individuals, government agencies, and fees for its
services. An easy way to remember is that a public foundation gets its funding from multiple
public sources. Both private foundations and public foundations (or public charities) are required
by the IRS to have 501(c)(3) status.
Form 990 and 990PF
The Internal Revenue Code not only has complex definitions of what constitutes various kinds of
nonprofit organizations, but it also has requirements on the information they must make public. All
foundations are nonprofit organizations and like other nonprofit 501(c)(3) organizations, they must
file a Form 990 annually. This Form 990 lists board members, financial status, and grants made.
In the case of private foundations (the kind you will solicit), the form they must fill out is
designated as 990PF. It can be an excellent tool in your research for information on foundations
that do not provide what you are looking for in their annual reports. So when information is
scarce, check the 990PF.
'Not a Private Foundation'
When you write a grant proposal, you'll probably be doing it on behalf of an organization that is
defined by the IRS as 'not a private foundation'—I know, you think your organization is not a
'foundation' in the sense we usually use the word, but that's how the IRS defines you. (By way of
explanation, the IRS determines 501(c)(3) status by various criteria, criteria that mostly concern
how an organization gets its support. If an organization does not meet specific IRS criteria, it's
determined to be 'not a private foundation'—in other words, the IRS defines organizations by
what they are not.) The importance of knowing that your organization is probably in the 'not a
private foundation status' is that it will have a letter certifying that it is 'not a private foundation'.
When you apply to a foundation for funding, this letter certifying 'not a private foundation' must be