There are a few key differences between a public and private foundation in the United States. I think that when you break it down there are three basic differences between a public and private foundation.

The private foundations are not protected by privacy laws, for one. A private foundation has to turn in annual reports to the attorney general as well as the Internal Revenue Service. They must also publish newspaper notice of the timing of its annual tax return.

For a private foundation there are numerous limitations that a public foundation does not require. They may only interact with certain entities financially, they pay two percent annually in terms of tax on its income and are punishable for financial failure.

The last difference is the fact that private foundations face a limited deductibility of gifts. These gifts of cash are limited to the equivalent of thirty percent of the organization's income.

In almost every tangible way we see that the public foundation is vastly superior to its privatized cousin. Basically, in the world of charity organizations, privacy costs.

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