Private foundations derive most of their funding from a single source which can be a family, an individual or a corporation.
All private foundations are required to file a form 990PF. The vast majority of the private foundations operate by making grants to other nonprofit organizations which partner with them to achieve a common charitable mission. These are known as grantmaking foundations or non-operating foundations.
Some private foundations also execute direct charitable activities. They are known as private operating foundations. Private operating foundations have higher philanthropic support from the public than do grantmaking foundations. Also, private operating foundations are not subject to the excise tax on failure to distribute income that grantmaking foundations are subject to.
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Private foundations vs. grantmakers
Most private foundations are by definition grantmakers since a great part of their charitable activities consist on giving grants to other nonprofits that pursue their same mission or interests. However, not all grantmakers are private foundations. A great amount of grantmakers are public charities.
Private operating foundations make direct charitable contributions which are not in the form of grants. In this part of the report, whenever we refer to charitable contributions of private foundations we include both the grants paid by all foundations, plus the charitable expenses of private operating foundations.
Size and age of private foundations
Private foundations in Arizona hold a total of $7.34 billion in assets. The majority of foundations, 56 percent or 800 foundations, are small – each holding less than $500,000 in assets. The 104 largest foundations, those that hold over $10 million in assets, comprise about 7 percent of the total number of private foundations; large foundations combined provide 54 percent of the total charitable contributions in the state of Arizona.
As seen in the chart at the bottom, most Arizona foundations are relatively new – 256 of them (18 percent) were founded in the 2020s alone.
