Starting A Foundation

Setting up a private foundation is fast and easy with Foundation Source.

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What Is a Private Foundation?

For more than 100 years, private foundations have been the preferred choice for those who want to:

  • Turn equity into purpose
  • Make the world a better place
  • Create an enduring legacy

That’s because you get the greatest control and flexibility of any charitable vehicle. Technically, private foundations are:

  • Independent legal entities
  • Organized exclusively for charitable, educational, religious, scientific or literary purposes
  • Controlled and funded by a single individual, family, or business (not public fundraising)

Contributions to the foundation are tax deductible. Foundations are required to pay out at least 5% of their net investment assets each year in qualifying distributions, which includes charitable grants as well as certain administrative costs.

How Much Does It Take to Start a Private Foundation?

You don’t have to be Bill Gates to start a foundation. Of the 91,000 foundations in existence today, 66% have assets under $1 million, according to IRS data. Through Foundation Source, it is practical to start a foundation with as little as $250,000.

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How Do I Fund My Foundation?

Private foundations can be funded with—and continue to hold—a wide variety of assets:

  • Cash and publicly traded securities
  • Tangible assets (art, jewelry, collectibles)
  • Intangible personal property (copyrights, patents, royalties)
  • Life insurance and annuities
  • IRA assets
  • Real estate
  • Alternative investments (private equity, partnerships)

Foundation Source does not manage investments or provide investment advice, but we work closely with the trusted advisors you designate.

Ownership and Control

A private foundation stays under your complete control. You have final say over:

  • Whether or not others share the in the governance (and if so, who will serve)
  • Where and how the foundation’s assets are invested
  • Which charitable activities to engage in
  • Whether the goal is perpetuity or to spend it down during your lifetime
  • Whether to hire employees (including family members)

Tax Management

A private foundation is a versatile tool for financial planning. Use yours to:

  • Get a current-year tax deduction, yet make gifts in the future
  • Enjoy exemption from estate and gift taxes on assets transferred to your foundation
  • Avoid capital gains taxes when you donate appreciated assets
  • Grow your foundation’s assets income-tax free

Philanthropic Creativity

In addition to supporting U.S. public charities, private foundations can:

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  • Donate directly to individuals in need
  • Run charitable programs, such as a coat drive
  • Set up scholarships and choose the recipients
  • Provide loans that are repaid to the foundation
  • Grant to international organizations
  • Provide funds to for-profit companies, when they’re for a charitable purpose

Family Engagement

A private foundation can help strengthen your family because it:

  • Unites family members scattered across the country
  • Strengthens family bonds through shared philanthropic activities
  • Prepares the next generation for the responsibilities of wealth
  • Teaches skills such as leadership, teamwork, and investment management
  • Awakens social and civic conscience to help prevent ‘affluenza’

Other Important Benefits

A private foundation also allows you to:

  • Reimburse expenses (e.g.,  travel, office space, consultants)
  • Compensate family members
  • Create a bully pulpit to rally others around your cause
  • Create a lasting legacy

Easy Foundation Setup

Foundation Source will have your new private foundation up and running in less than a week. Three steps, and we’ll take care of the rest.

1. Choose a Name for Your Foundation

You can name it after your family or something entirely different that inspires you.

2. Complete the Brief Set-Up Questionnaire

This tells us who will fund the foundation and where the investment account will reside.

3. Fund Your Foundation and Start Giving

Minimum initial funding: $250,000.

Foundation Source does not manage investments or provide investment advice, but we work closely with the trusted advisors you designate.

Ongoing Foundation Support

Working with private foundations is the only thing we do. You get everything you need from day one, and when you’re ready to grow, our services grow with you. We offer three tiers of service, so you can get the precise level of support your foundation requires. This comprehensive, integrated service includes:

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Administration

  • Record keeping
  • All required state and federal filings
  • Compliance monitoring
  • Grant check processing

Web-Based Tools

  • Charity research
  • Automated granting
  • Grants management
  • Online reporting

Advisory Services

  • Governance and mission
  • Family engagement and succession planning
  • Strategic planning and board development
  • Best practices review
  • Retreat and meeting facilitation

Fred Sievert, President

The Sievert Family Foundation

I am grateful that Foundation Source has served a vital role in facilitating this Sievert family legacy.

Fred Sievert, President

The Sievert Family Foundation


Initially, I resisted setting up a private foundation, but Foundation Source has made this not only a relatively effortless process, but also a very enjoyable one. I am grateful that Foundation Source has served a vital role in facilitating this Sievert family legacy.

Karen Powers, Foundation Administrator

Murphy Family Foundation

We were up and running far more quickly than we expected.

Karen Powers, Foundation Administrator

Murphy Family Foundation


Foundation Source has introduced the Murphy Family Foundation to a totally modern and much faster way of working by receiving proposals online. We were up and running far more quickly than we expected. I'm always impressed by Foundation Source's responsive service. It surprises me how far their people will go to assist us.

Getting Started Is Simple:
Name Your Foundation
Submit a Quick Questionnaire
Fund Your Foundation ($250k minimum)
What's Your Next Move?
Let's Start a Conversation

Call 800-839-0054 // Send Us an Email