Private Foundations Versus Supporting Organizations
There are two types of family foundations: private foundations and supporting organizations. Private foundations, the more common of the two, offer more flexibility and control (i.e., they can select and oversee their own board of directors and grantmaking decisions), while supporting organizations enjoy more favorable tax treatment.
Gifts made to either type of family foundation are generally tax deductible from the donor’s annual income tax, yet these deductions differ depending on the foundation’s structure, the type of property or asset contributed, and the donor’s income level. As a general rule, all gifts to a family foundation are removed from the donor’s estate, avoiding estate or gift taxes.