What is a Private Foundation?

A private foundation is a 501(c)(3) tax-exempt organization that is organized solely for charitable, educational, religious, scientific or literary purposes for which contributions are tax deductible. Donors receive immediate tax deductions for contributions even though donations are disbursed in the future. In order to qualify as a private foundation, the entity must be approved by the IRS under Section 501(c)(3) of the Internal Revenue Code.

Private Foundations are an easy alternative to donor-advised funds in that the contributions are controlled exclusively by the management board consisting of individuals, families, or businesses. Donors can also govern contributions with greater flexibility through investments, disbursements, and expenses.

What information do you need to start the application?

The foundation application consists of four sections - Registration Information, Management, Purposes, and Estimated Financials.

• The Registration Information section consists of a Foundation Name, Address, and Contact Information.
• The Management section requires selection of a President, Vice-President, Secretary and Treasurer. These positions can be held by a single person, family members, or any other person
• The Purposes section is the most creative and detailed. Within this section you will be able to describe the procedures, details, standards, or criteria in carrying out your charitable, educational, religious, scientific and literary purposes with a large selection of options within each purpose.
• The Estimated Financials section requires an estimated timetable for donations and expenses.

As part of our service, we also offer a website section as part of our promotion. Here your foundation will be able to select a domain name, website theme, and other features to enhance your experience. The website will assist you in portraying your goals, ideals, and purposes to friends, families, or other potential contributors.

How long does it take?

At Make A Foundation, we strive to be as efficient as possible and always try to improve our procedures. Once you finish the application, we will contact you within 5 business days. If we have any questions, we will work through them with you, and mail your documents to you to be signed. We will also include return postage to return the documents to us. Once we have received your packet, we will forward it onto the IRS. The IRS application process can take anywhere from one to six months. Fortunately, the foundation is effective the date that you sign the documents and you may start making donations once you receive your Tax ID number in the packet. As soon as the IRS has approved your foundation, you will receive a Determination Letter which qualifies your organization as tax-exempt.

Most 501(c)(3) organizations must file an annual return detailing their income, expenditures, and activities. All private foundations must file Form 990 PF, Return of Private Foundation.

How much can I donate and still receive a tax deduction?

Typically, donations to a private foundation are tax deductible up to 30% of adjusted gross income for cash. Individuals should consult with their tax advisor.

How much does it cost?

The IRS charges an application fee of $750 dollars which is not included in our pricing. You will need to submit a check for that amount when you return your application to us as described above.
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