Much of what is written about private foundations focuses on their restrictions— what you can’t do. In truth, the IRS allows private foundations wide latitude to undertake creative, inventive, effective philanthropy that couldn’t be accomplished by other means. If you need versatility to bring your philanthropic vision to fruition, a private foundation is the best possible structure within which to work.
Making donations to public charities will always be the cornerstone of foundation giving but inspired philanthropists go beyond the simple transfer of funds from the foundation’s bank account to 501(c)(3) organizations. With a private foundation, the legal status of a grantee organization is often less important than how the money will be used. Whether giving to an orphanage in India that has never heard of an IRS 501(c)(3) designation or a hardware store in Newark running a safe trick-or-treating program for kids in tough neighborhoods, the IRS allows you to fund most any charitable cause as long as you follow the rules.