2020 Year-End Planning for Private Foundations

10/7/2020: This letter has been updated since its original publishing date to address changes in legislation and other trends impacting private foundations.

We hope this letter finds you healthy and safe during this unprecedented time. As your foundation continues to operate, consider how today’s financial actions can impact the foundation’s year-end financial strategies. Below are ideas for your consideration before the foundation’s year-end:

Required Distributions of Income

Private non-operating foundations must annually distribute 5% of the value of their average non-charitable use assets each year. Non-charitable use assets include all assets other than those used directly in carrying out the foundation’s exempt purpose. The foundation’s current year qualifying distributions are applied towards this 5% distributable amount, also referred to as the required minimum distribution or “RMD,” to determine whether the foundation will have any excess distributions carried forward to next year or whether the foundation will need to make it up by the end of the following tax year.

Click here to read the full year-end planning letter.