What Is the Difference Between a Private Foundation and a Public Charity?

An Estate Planning FAQ with Mary E. Vandenack.

Private foundations and public charities are both tax exempt entities under section 501c3 of the Internal Revenue Code. The differences are that a public charity qualifies for a little more in terms of tax benefits. If you make a contribution to an organization that qualifies as a public charity, there is a little bit larger percentage that you can deduct in certain circumstances. The limitations aren’t as significant on the private foundation. The public charity is typically one that benefits the public at large rather than a smaller group. The private foundation is more typically formed by a smaller group and benefits a smaller group of individuals.

© 2014 Parsonage Vandenack Williams LLC

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