Private Foundation Planning
Establish a family foundation for long-term philanthropic impact with governance control, next-generation education, and structured legacy planning.
What It Is
A private foundation is a 501(c)(3) charitable entity funded and controlled by a family or business. It enables long-term philanthropic giving with governance and investment control. Rules include payout requirements, restrictions on self-dealing, investment standards, and reporting.
Who It's For
Families and Founders
Who want multi-year giving with board control
Executives with Concentrated Wealth
Seeking a structured legacy vehicle
Active Donors
Already giving six figures annually who want formal oversight and tracking
How It Works
Establish the foundation and governing documents
Work with attorneys to create the legal structure and governance framework
Contribute cash or appreciated assets
Fund the foundation with initial contributions to begin operations
Create an investment and grantmaking policy
Develop formal policies for managing assets and distributing grants
Make qualifying distributions each year to public charities
Meet annual payout requirements through strategic grantmaking
File annual returns and maintain records
Ensure ongoing compliance with IRS reporting requirements
Potential Benefits
Current-year charitable deductions
Subject to IRS limits for immediate tax benefits
Centralized grantmaking
With audit-ready records and professional oversight
Family governance and legacy
Next-gen education and brand stewardship opportunities
Complex asset acceptance
Ability to accept various asset types with proper controls
Guardrails and Risks
Payout Requirements
Payout requirement and excise tax framework apply
Self-Dealing Restrictions
Prohibited self-dealing and taxable expenditures must be avoided
Public Disclosure
Heightened public disclosure via Form 990-PF
Investment Standards
Investment policies must avoid jeopardizing investments
Stonebridge Process
Feasibility and Goals Session
Assess your philanthropic objectives and foundation suitability
Entity Formation
Coordinate with attorney to form the entity and draft policies
Strategic Planning
Funding plan, investment policy, and granting calendar
Ongoing Compliance
Compliance calendar and annual filing support
Frequently Asked Questions
Can I pay family a salary to run the foundation?
Reasonable compensation for bona fide services may be possible with documentation and conflict procedures.
Can the foundation fund my company's project?
Only if it meets strict charitable and self-dealing rules. Most related-party transactions are restricted.
Important Disclosures
All strategies are subject to IRS rules, limitations, and documentation standards. Numbers are illustrative only. Stonebridge Tax Advisors LLC does not provide legal or investment advice. Implementation requires coordination with your CPA, attorney, and qualified third parties where applicable.
Ready to Explore Private Foundation Planning?
Our Tax Impact Assessment will help determine if a private foundation aligns with your philanthropic goals and tax planning objectives.