Private Operating Foundation

Private Operating Foundation

A Private Operating Foundation is a type of private foundation that primarily conducts its own charitable activities rather than just making grants to other charitable organizations. It is required to distribute a significant portion of its income for charitable purposes and must operate its own programs that benefit the public rather than simply donating funds to other charities.

For tax purposes, a Private Operating Foundation is classified under section 4942(j)(3) of the Internal Revenue Code, which allows it to avoid the mandatory minimum distribution requirements that apply to traditional private foundations, provided it meets certain criteria regarding its charitable activities. For example, if a Private Operating Foundation runs a museum, it would need to actively engage in educational programs and exhibitions to qualify.