The vast majority of foundations are private
foundations, non-governmental, nonprofit organizations that
have their own funds or endowments. They are managed by their own
trustees or directors and are usually founded to benefit educational,
charitable, social, religious or other activities serving the common
good.
There are three types of private foundations:
Private foundations are required by the Internal
Revenue Service to file informational tax returns called 990-PFs,
and they pay out at least 5 percent of their income per year. Generally,
private foundations fund only nonprofit organizations that are 501(c)(3)s.
Family foundations behave very differently depending on their size.
- Large family foundations operate similarly to other large
foundations, with professional staff, clear guidelines
and a process for reviewing proposals.
- Small family foundations, on the other hand, are usually run
by family members. They often have broad guidelines, and they
can be far more flexible about proposal
format and deadlines. They tend to give smaller grants,
but may fund ongoing operating
expenses. Personal influence with board members may be helpful.
Since private foundations submit data to the Internal
Revenue Service, information about them is available. Individuals
and corporate giving programs, on the other hand, are not required
to disclose the details of their charitable giving, which often
makes it more difficult (or impossible) to get this information.
Rather, names and giving details must be gleaned from press releases,
donor lists published by recipient agencies and giving reports published
by corporations.
TIP: If you cannot find information about a donor organization,
be sure to verify whether it really is a private grantmaking foundation.
Resources to help you do this:
According to Giving
in Illinois 2005, Illinois foundations and corporate giving
programs gave $1.49 billion in 2003, a 10 percent decrease from
2002. The number of foundations and corporate giving programs
increased 12 percent in the same time period, to 2,888.
Purchase Giving
in Illinois 2005 to see how private foundations spread out
their giving by subject area.
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