Apr 1, 2011 12:00 PM

By Laura H. Peebles, tax director in the Washington, D.C. office of Deloitte Tax LLP

If I had to name one difference between private foundations (PFs) in the 20th and 21st centuries, I would use one word: “involvement.” In both centuries, plenty of PFs have made grants to operating public charities, without expecting anything in return other than an annual report from the grantee. But I recently realized, looking back on the first decade of the 21st century, that something had indeed changed among the foundations I work with: I've been involved with far more private operating foundations (POFs) in the last 10 years than in the previous 20. A POF is a type of PF that devotes most of its resources to conducting direct charitable operations rather than simply making grants from investments.

Perhaps the change is due to the dot-com entrepreneurial spirit being carried into the philanthropic realm; or perhaps another reason accounts for it. Whatever the reason, as individuals become wealthy and then want to give something back to their community or the world, they often move from being simply donors to being philanthropists. Some take the first steps into the philanthropic waters by moving from merely writing checks to accepting grant applications and then receiving reports on the results of their grantmaking. Others go all the way and apply their entrepreneurial energy to charitable projects by managing the projects themselves. When the second group go to their professionals for advice on how to wrap the tax code around their ideas, the tool that may be the best fit is the POF.

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

Click here to download the 2011 Trust Glossary

50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

Click here to view the most up to date guide (September 2011)

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