What are the types of Foundations?
The universe of charitable organizations under Section 501(c)(3) divides into two major groups – public charities and private foundations. Public charities – like charitable hospitals — receive financial support from a wide range of donors, whereas private foundations derive support from limited groups. Based on this difference, private foundations must comply with regulations not applied to public charities. These extra requirements arise from the theory that public charities receive oversight by the public; because accountability to many donors and recipients of care requires public charities to meet the needs, interests, and expectations of a broad cross-section of the community. By contrast, private foundations are not beholden to a large group of donors; so the Code imposes extra and complex rules on private foundations to ensure that their activities remain in the public’s interest. Failure to follow these guidelines can expose private foundations and their managers to excise ta
