The Difference Between a Public Charity and a Private Foundation

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Thinking about a foundation generally, lets you think about charity. However, you should know that a foundation is an organization that’s tax exempt, without profit and it’s publicly supported. Its goals are generally long termed, like building permanent, named funds for the broad-based public benefit in the area that they are located.

The Public Charities
Most of the income of the public charities derives from the support of the general public, individual grants, private foundations or government. Even if some of the public charities are engaged in grant activities, most of them will conduct a direct service or other activities that are tax-exempt. However, a private foundation will get its main fund from a single source, like an individual, a specific family, a big corporation and usually it activates as grant-maker.

Private Foundations
Generally, a private foundation is that nonprofit and nongovernmental organization that has a principal fund that is managed by its own directors and trustees. The private foundations aid or maintain charitable, religious, educational or other types of activities that serve the public good, mainly by making grants to other nonprofit organizations.

Why Should You Know the Difference?
It’s essential to examine the giving history of a funder, as it will tell you a lot about the foundation prospects. Any past grants can offer you information about the funder’s preferred subjects, the types of organization and the range of grant amounts.

All this information is easier to get from a private foundation, for which is mandatory to disclose all the grantees and the grant amounts in its accountability forms, especially the ones that are public. However, a grant-making public charity doesn’t have to give any of this information. So access to its grants will definitely depend on how much each specific founder is willing to share with the general public to its website, accountability forms or other communication channels.

If you can’t find anything about a specific foundation, you can search their website on the internet in the founder’s name. You’ll find different information on them, and you’ll see what news or press releases are about the grants that it made. It will all depend on their purpose and their goals, but it can be anything from the examples that we’ve given you. However, if you can’t find anything relevant, write them an email or give them a call and you might find the answers you were looking for.