10 Things You Didn’t Know You Could Do With Your Foundation

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Categories: Starting a Foundation Supporting Your Foundation

Search Topics: Advanced Grantmaking Strategic Planning

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Grant to Individuals: Private foundations are permitted to provide funds directly to individuals for emergency relief or hardship assistance.

Direct Charitable Activities: A private foundation can conduct its own charitable programs, in addition to its granting activities, without converting to an operating foundation.

Make Program-Related Investments (PRIs): Loans, loan guarantees, and equity investments, when made by a foundation to support a charitable purpose, are called Program-Related Investments (PRIs). Since PRIs are paid back (potentially with interest), you are able to recycle your philanthropic capital for other charitable purposes.

Donate Internationally: Private foundations can grant directly to overseas charitable organizations, even when there is no IRS-recognized 501(c)(3) entity to serve as an intermediary.

Give Awards and Prizes to Spur Progress: Awards reward past performance (e.g., the Nobel Prize), while prizes serve as an incentive for future performance to spur innovation in a specific area (e.g., the X Prize competition).

Pay Programmatic Expenses: The IRS considers due diligence related to the foundation’s mission a legitimate expense. This can include site visits, board meetings, and conferences in the foundation’s areas of interest.

Make Set-Asides: As long as they meet certain requirements and obtain advance approval, the IRS allows private foundations to set aside funds in order to build up the reserves necessary for an ambitious future project.

Undertake Impact Investments: There used to be a firewall between a foundation’s investments and its grantmaking. But a relatively new idea, Impact Investing, aligns a foundation’s financial investments to its mission while maintaining financial returns.

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