Understanding the Difference Between Public Charities and Private Foundations
Many people are not sure about the difference between public charities and private foundations. Although both are not for profit organizations, they have their differences, which those who might be looking for grants and those who are planning to make a donation or be part of their good cause may want to know. Non-profit organizations are allowed to be formed by the Internal Revenue Service (IRS) and these organizations are exempted for tax. This means that donations that are used in these organizations are tax deductible. They are generally divided into two categories, which are private foundations and public charities. The IRS typically categorized non-profit organizations as private foundations, unless they request to be placed under the public charities category.
Sources of Funds
Public charities get their funds from companies, individuals, other organizations and the general public. They ask for donations, which as mentioned are tax deductible. Private foundations on the other do not ask for donations from the public. They get their funds from specific companies or individuals.
Grants and Programs Provided
Grants are provided by both types of organizations, but as mentioned, the grants provided by private foundations are from the funds given by specific companies and individuals. They also assist public charities and organizations in providing grants to qualified individuals. These private organizations usually don’t have their own programs, but instead sponsor programs of other non-profit organizations. However, there are now private foundations, called the operating private foundations that also run their own programs. Public charities on the other hand run their own programs like for instance, a shelter for women, elderly or children.
Public Opinion Importance
Private organizations have private funding, which is why they don’t really need the public approval of whatever their causes are. The downside of this is that they may not be aware or may not be focusing on things that people really need most as they may not always communicate what them to hear about their opinions. Public charities on the other hand get their funding from the general public, therefore it’s important that they hear what people have to say so they would get the support they need to run their programs.
Although these private organizations and public charities have their differences, they also have their similarities. Both of these types of organizations are there to support good cause. People who are looking for grants would find it helpful to know more about these organizations, whether public or private to determine where they would have a higher probability of being granted these grants. It could be easier to find more information about a private organization because various details are required by IRS on their forms. Public charities may not have as much information available but you could still find out more about their programs by thorough research.
If you wish to donate your money to a good cause, you may choose a public charity since private organizations usually do not accept for donations as they have private funding. You also have the option to start your own private foundation.
Photo Attribution:
Featured and 1st image by Oscarvasconcelos (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
2nd image by Lance Cpl. Medina Ayala-Lo (https://www.dvidshub.net/image/1932296) [Public domain], via Wikimedia Commons
