Public charity vs. private foundation

Every 501(c)(3) is classified as either a public charity or a private foundation, and the distinction changes everything from deduction limits to which IRS form the organization files.

Public charities

• Funded by the general public — many donors, program fees, government grants. The IRS "public support test" requires a broad funding base.
• Run programs directly: food banks, hospitals, schools, shelters.
• File the Form 990 (or 990-EZ/990-N when small).
• Cash gifts are deductible up to 60% of your adjusted gross income.

Private foundations

• Typically funded by one family, person or company — think endowed grantmakers.
• Mainly make grants to other charities rather than running programs; must pay out roughly 5% of assets each year.
• File the Form 990-PF, which discloses investments and every grant made.
• Cash gifts are deductible up to 30% of AGI — half the public-charity limit.

On CharityIndex, a foundation's profile leans toward its grants-made table — useful for grantseekers researching funders — while a public charity's profile leads with program finances and efficiency. The exemption badge on each profile tells you which one you're looking at.