Readers of Private Foundations: Law & Practice will be well aware that the term ‘foundation’ is used in many different ways. The term ‘private foundation’, with which this website is concerned, is for the preservation of individual and family assets. A different meaning applies in the United States where private foundations are charitable foundations set up by individuals and although the individuals concerned receive some tax advantage in respect of their donations, the foundation is not allowed to benefit individuals.
This American use of the expression seems to be spreading; for example, in the UK the House of Commons’ International Development Committee is taking evidence on the use of private foundations and on 8th November 2011 took evidence from executive officers of the Bill and Melinda Gates Foundation. This noble organisation is well known for its charitable purposes and, being financed from the wealth of the Gates family, is therefore reasonably described as being ‘private’. It is necessary, however, to distinguish this type of privately endowed charitable foundation from the private foundation used in family asset planning.

The International Development Committee has particular interest in the development of ‘private foundations’; their relationship with other charitable operations, the role and influence of high profile advocates on international development as well as their accountability. It is estimated that private philanthropy now accounts for roughly the same as ‘programmable aid’ official donors at around $60 billion annually.