# Domestic Private Foundations and Charitable Trusts, > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A853188cc75709993 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Domestic Private Foundations and Charitable Trusts, 1999 by Melissa Ludlum D omestic private foundations provided $22.8 billion in contributions, gifts, and grants to charitable organizations and initiatives in Reporting Year 1999, a 17-percent increase over 1998. These outlays, which generally are awarded to charitable organizations, communities, or individuals, contribute to the operation of charitable programs in such areas as education, arts and humanities, health, human services, and environmental protection [1]. Foundations, which are tax-exempt under Internal Revenue Code section 501(c)(3), are annually required to file the information return, Form 990-PF. The 62,694 Forms 990-PF filed for 1999 represented an 11-percent increase over the previous year. Total fair market value of assets for private foundations grew by 18 percent to $466.9 billion for 1999, with investment assets, at $444.2 billion, representing the majority of that amount. Investment assets increased by 17 percent overall, with investments in securities, including Government obligations and corporate stocks and bonds, growing by 14 percent. The Bill and Melinda Gates Foundation, which reported 3 percent of the fair market value of total assets for all foundations, became the largest domestic filer for 1999 and received significant financial contributions. The contributions, gifts, and grants made to the Bill and Melinda Gates Foundation represented 30 percent of the total received by all domestic foundations and precipitated a 39-percent increase in total revenue, which reached $83.3 billion, and an 85-percent rise in total contributions, gifts, and grants received. Various financial data, including private foundation asset, revenue, and expense items for 1998 and 1999, are shown in Figure A. Nonexempt charitable trusts, as described in Internal Revenue Code section 4947(a)(1), are also required to file Form 990-PF. The number of domestic charitable trusts that filed Forms 990-PF increased by 5 percent from 1998, to 2,805 [2]. These trusts reported fair market value of assets of $5.3 billion, revenue totaling $0.6 billion, and distributions of $0.2 billion in contributions, gifts, and grants [3]. Melissa Ludlum is an economist with the Special Studies Special Projects Section. This article was prepared under the direction of Michael Alexander, Chief. StatisticsofIncomeStudies The statistics presented in this article on both private foundations and charitable trusts are based on sample data from Form 990-PF, Return of Private Foundation (or Section 4947(a)(1) Charitable Trust Treated as a Private Foundation), the annual information return filed by these organizations [4]. Statistics of Income studies on private foundations have been conducted for Reporting Years 1974, 1979, 1982, 1983, and annually since 1985. Studies on 4947(a)(1) charitable trusts that are treated as private foundations have been conducted for Reporting Year 1979 and annually since 1989. PrivateFoundations OrganizationalDefinitionsandLegislativeBackground Under Internal Revenue Code 501(c)(3), private foundations and publicly-supported organizations, such as charities, are deemed exempt from the income taxes outlined in Subtitle A of the Internal Revenue Code, and are thus referred to as “taxexempt organizations.” Together, tax-exempt filers represent more than $1.8 trillion in total assets, which were reported in book value by all types of organizations for 1999. They contribute billions of dollars in grants and support for charitable operations each year. A private foundation is distinguished from a publicly-supported charitable organization, which receives broad support from diverse sources in the general public, by its narrow sphere of support and control, which is generally limited to an individual, family, or corporation. In most cases, a foundation is organized in the form of a corporation, association, or trust, which provides some manner of charitable support or conducts charitable activities. Due to this centralization of control, foundations are not directly accountable to the public, and are thus subject to greater Federal regulation than publicly-supported organizations [5]. Initially, all organizations that receive tax exemption are considered private foundations and are thus required to file Form 990-PF. Organizations that meet certain requirements will then be further defined as publicly-supported or charitable, and will instead file Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, the short version of this information return. Some publicly-supported exempt organizations, 137 Domestic Private Foundations and Charitable Trusts, 1999 Figure A Domestic Private Foundations: Selected Financial Items and Percentage Changes, 1998-1999 [Money amounts are in millions of dollars] Item 1998 1999 Percentage change, 1998-1999 (1) (2) (3) Number of foundations............................................................................ 56,658.0 62,694.0 10.7 Total assets (fair market value)............................................................................ 397,084.5 466,863.0 17.6 Cash (non-interest bearing accounts)...................................................................................... 2,753.6 3,041.6 10.5 Investments, total......................................................................................................................... 380,530.6 444,151.1 16.7 Savings and temporary cash investments....................................................................... 25,618.4 33,534.1 30.9 Investments in securities, total............................................................................................. 317,900.3 363,442.0 14.3 Government obligations.............................................................................................................. 35,726.5 42,703.6 19.5 Corporate stock.............................................................................................................. 249,301.6 283,373.8 13.7 Corporate bonds.............................................................................................................. 32,872.2 37,364.7 13.7 Other investments ¹................................................................................................................. 37,011.8 47,175.0 27.5 Total revenue............................................................................................. 83,286.0 39.4 Contributions, gifts, and grants received............................................................................................. 20,604.8 38,207.8 85.4 Net gain (less loss) from sales of assets............................................................................................. 26,959.6 30,808.2 14.3 Dividends and interest from securities............................................................................................. 8,624.7 9,334.7 8.2 33,876.3 30.8 22,762.8 17.4 Total expenses.......................................................................................................... 59,735.0 25,901.8 Contributions, gifts, and grants paid ............................................................................................. 19,394.2 ¹ Sum of "Investments in land, buildings, and equipment (less accumulated depreciation)," "Investments in mortgage loans," and "Other investments," as reported on the Form 990-PF. "Other investments" includes items such as advances; certificates of investment; and investments in art, coins, gold, and gems. 138 138 including churches and organizations with minimal asset holdings and income, are exempted from filing any information return. For 1999, private foundations represented roughly 23 of percent all Forms 990, 990-EZ, and 990-PF filed. Additionally, they held approximately one-fifth of total assets, which are reported, in book value only, by both Form 990 and 990-EZ filers. Private foundations earned only 9 percent of all revenue reported on the three forms [6]. Depending on the type of charitable support that a private foundation provides, it may be classified as either “operating” or “nonoperating.” An operating foundation is directly involved in the operation of its own charitable activities [7]. Examples of this type of organization include certain museums, facilities providing housing or healthcare, or organizations conducting scientific research. Although operating foundations are not legally required to distribute grants to other organizations, many choose to contribute to other nonprofit programs. A nonoperating foundation is defined as such because it generally supports charitable programs indirectly, providing grants to other nonprofit organizations, rather than operating programs of its own. These foundations, the most common Form 990-PF filers, are required to distribute a minimum amount for charitable purposes, annually; the required amount is based on 5 percent of the average monthly fair market value of their “noncharitable-use (or net investment) assets” [8]. Those organizations that do not meet the required “distributable amount” in the current year may avoid paying the undistributed income tax by fulfilling the requirement by the end of the following year. Although private foundations are granted exemption from Subtitle A income tax, they may be subject to certain other taxes. All organizations exempt under section 501(c)(3) are required to pay taxes on income earned in a manner that is not substantially related to the organization’s exempt purpose. Such income and tax are reported separately on Form 990-T, Exempt Organization Business Income Tax Return. The Tax Reform Act of 1969 (TRA69) established additional taxes specific to private foundations and was the basis for sections 4940-4945 of the Internal Revenue Code. These regulations include an excise tax on income received only from investments, or “net investment income,” which is applicable to all Domestic Private Foundations and Charitable Trusts, 1999 nonoperating and most operating foundations [9]. TRA69 also imposed excise taxes on “prohibited activities,” which are determined to be contrary to the public interest. Such activities include business ventures or investments that in some way jeopardize the foundation’s charitable purpose, or acts of “selfdealing,” which are defined as financial transactions with foundation officers, directors, trustees, substantial contributors, or “other disqualified persons.” TRA69 also provides for the taxation of excess business holdings, certain high-risk investments, and various political and legislative activities, such as participation by a foundation on behalf of, or in opposition to, a candidate for public office, or efforts to influence legislation by contacting (or encouraging the public to contact) legislators. Additionally, TRA69 established the tax on nonoperating foundations that fail to meet the required minimum payout after the 1-year grace period. Taxes on these prohibited activities are reported separately on Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code, and are not included in this article. Data for 1999 are based on the returns of domestic private foundations only and do not include information reported by foreign foundations, also required to file Form 990-PF [10]. These organizations, which are organized abroad but receive certain degrees of support from U.S. sources, usually account for less than 1 percent of Forms 990-PF filed. Foreign private foundations may, but are not required to, make charitable distributions within the United States. AProfileofthe1999Form990-PFFilers Throughout this article, foundations will be discussed based on size class, as determined by the size of their end-of-year fair market value of total assets. “Small foundations” refers to the group holding less than $1 million in fair market value of total assets (including foundations that either do not report assets or that report assets equal to zero), “medium-size foundations” refers to the group holding from $1 million to less than $50 million in assets, and “large foundations” refers to the group holding $50 million or more in assets. Small foundations accounted for 66 percent of the 62,694 returns filed for 1999, but held only 2 percent of assets, as shown in Figure B. In contrast, large foundations represented fewer than 2 percent of all returns filed, but accounted for 70 percent of asset holdings, with 63 percent of total assets held by those foundations with fair market value of total assets of $100 million or more. Large foundations also dominated the revenue category, with those holding $100 million or more in assets reporting nearly 60 percent of total revenue. Nearly 94 percent of Forms 990-PF filed for 1999 represented nonoperating foundations, with the remaining 6 percent made up of operating foundations. Nearly 85 percent of nonoperating and 54 percent of operating foundations were characterized as grantmaking for 1999, with grantmaking foundations representing 83 percent of all Form 990-PF filers. Foundations awarded $22.8 billion in contributions, gifts, and grants for 1999. Of those nonoperating foundations that were not classified as grantmaking, 11 percent reported “no distributable amount” and, therefore, were not subject to the distribution requirement, while 37 percent satisfied the distribution requirement through other types of charitable disbursements, including administrative and operational expenses for charitable purposes, excess distributions from previous years, program-related investments, acquisition of charitable-purpose assets, and charitable “set-asides” for future projects. The majority, 52 percent, opted to meet the 1999 requirement during their 2000 accounting periods or to pay the tax on undistributed income [11]. TenLargestDomesticFoundations The largest foundations, those holding $100 million or more in assets, held 63 percent of all assets but accounted for fewer than 600 returns, or less than 1 percent of all foundations. Additionally, the largest organizations were responsible for 50 percent of all grants paid. Ten foundations alone accounted for nearly one-third of the total assets held by the largest domestic foundations. These foundations, along with data on total assets and grants paid for 1999, are shown in Figure C. Forms 990-PF are available for public disclosure under Internal Revenue Code section 6104(b). Due to the public disclosure requirements, Forms 990-PF differ from most other IRS return data, since individual return information may be published. The Bill and Melinda Gates Foundation, which reported $15.8 billion in fair market value of total 139 Domestic Private Foundations and Charitable Trusts, 1999 Figure B Domestic Private Foundations: Selected Financial Items, by Size of Fair Market Value of Total Assets, 1999 [Money amounts are in millions of dollars] All foundations Asset size Nonoperating foundations only Number of Total assets Total Number of Total assets Total returns FMV revenue returns FMV revenue (2) (3) (4) (5) (6) (1) Number or amount Total......................................................................... 62,694 466,863.0 Number or amount 83,286.0 58,840 426,316.5 74,327.3 Small foundations: Less than $100,000 ...............................................................16,562 562.3 369.4 15,659 539.0 363.1 $100,000 under $1,000,000............................................................... 24,623 9,829.0 3,608.0 23,202 9,126.0 3,130.2 $1,000,000 under $10,000,000............................................................... 16,941 54,507.9 11,803.8 15,762 50,689.0 10,826.2 $10,000,000 under $50,000,000............................................................... 3,472 73,150.3 12,413.1 3,227 67,769.3 11,435.0 Medium foundations: Large foundations: $50,000,000 under $100,000,000............................................................... 507 35,194.4 5,826.9 469 32,567.9 5,349.6 $100,000,000 or more............................................................... 567 293,619.1 49,264.8 521 265,625.3 43,223.2 Percentage of total Total......................................................................... Percentage of total 100.0 100.0 100.0 100.0 100.0 100.0 26.4 0.1 0.4 26.6 0.1 0.5 $100,000 under $1,000,000............................................................... 39.3 2.1 4.3 39.4 2.1 4.2 $1,000,000 under $10,000,000............................................................... 27.0 11.7 14.2 26.8 11.9 14.6 $10,000,000 under $50,000,000............................................................... 5.5 15.7 14.9 5.5 15.9 15.4 Small foundations: Less than $100,000............................................................... Medium foundations: Large foundations: 140 $50,000,000 under $100,000,000............................................................... 0.8 7.5 7.0 0.8 7.6 7.2 $100,000,000 or more............................................................... 0.9 62.9 59.2 0.9 62.3 58.2 NOTES: Detail may not add to totals because of rounding and processing tolerances. "FMV" is an abbreviation for fair market value. 140 assets, became the largest domestic filer for Reporting Year 1999. The Gates Foundation, along with the Ford Foundation, David and Lucile Packard Foundation, the J. Paul Getty Trust, and the Lilly Endowment, Inc. were the five largest domestic foundations, each holding in excess of $10.0 billion. As in previous years, the J. Paul Getty Trust was the only operating foundation included in the top ten. The Ford Foundation and Lilly Endowment led the largest foundations in charitable grants paid again for 1999, disbursing $654 million and $558 million, respectively. Nine of the ten largest foundations paid out larger amounts in grants for 1999 than for the previous year. The largest increase, 385 percent, was reported by the Bill and Melinda Gates Foundation, which disbursed $549 million for 1999. The W.K. Kellogg Foundation, which disbursed $187 million for 1999, was the only foundation in the top ten that reported a decrease in grants paid, down from $203 million for 1998 [12]. SourcesofFoundationRevenue The majority of foundation revenue (94 percent) was gained from contributions received, dividends and interest from securities, and net gain from sales of assets. The amount of contributions, gifts, and grants reported increased by a substantial 85 percent over the prior year and was the major source of foundation revenue, accounting for 46 percent of the total. Net gain from sales of assets, which accounted for 37 percent of total revenue, increased by 14 percent. Of the three major components of revenue, dividends and interest from securities accounted for the smallest percentage of the total, 11 percent, and experienced an 8-percent increase. Figure D shows revenue sources for 1999 for all foundations, by asset-size class. All three asset-size categories of private foundations reported contributions received as the major revenue source, with small foundations reporting contributions received as 73 percent of total revenue. Domestic Private Foundations and Charitable Trusts, 1999 Figure C Top Ten Domestic Private Foundations, by Size of Fair Market Value of Total Assets, 1999 [Money amounts are in millions of dollars] Total Name and ranking State (1) Total grants assets¹ paid (2) (3) 1. Bill & Melinda Gates Foundation........................................................... WA 15,827.1 549.4 2. Ford Foundation........................................................... NY 14,682.0 653.9 3. David and Lucile Packard 13,151.9 391.6 4. J. Paul Getty Trust ²........................................................... CA 10,929.8 5. Lilly Endowment, Inc............................................................ IN 10,418.1 Foundation.......................................................... CA 17.3 558.3 6. Robert Wood Johnson Foundation........................................................... NJ 8,647.2 290.2 7. W.K. Kellogg Foundation Trust and W.K. Kellogg Foundation ³.......................................................... NY/MI 4,853.1 186.6 8. John D. and Catherine T. Macarthur Foundation.......................................................... IL 4,629.5 158.6 9. Andrew W. Mellon Foundation........................................................... NY 4,619.7 161.5 10. Starr Foundation........................................................... NY 4,486.5 143.8 92,245.0 3,111.2 Total............................................................................ ¹ Fair market value. ² The J. Paul Getty Trust is an operating foundation. All other organizations listed are nonoperating foundations. ³ The W.K. Kellogg Foundation Trust (classified as a private foundation and not as a section 4947(a)(1) charitable trust) is located in New York and has a "pass-through" relationship with the W.K. Kellogg Foundation, located in Michigan. Typically, the entire amount of the annual qualifying (charitable) distributions of the W.K. Kellogg Foundation Trust is made in the form of a grant to the W.K. Kellogg Foundation, which then redistributes the grant for charitable purposes (and does not count the redistribution as a qualifying distribution of its own). The combined total assets of the two organizations are shown in the "Total assets" column, but, in order to avoid duplication, only the grants paid by the W.K. Kellogg Foundation are shown in the "Total grants paid" column. NOTE: Detail may not add to totals due to rounding. Medium and large foundations, which received 48 percent and 43 percent, respectively, of their revenue from contributions received, remained less dependent on contributions as a source of revenue than did their smaller counterparts. However, large foundations reported greater contributions than in previous years, due in large part to the sizeable amounts received by the Bill and Melinda Gates Foundation, which reported nearly half of all contributions received by large foundations. Net gain from sales of assets remained a substantial component of revenue for both medium foundations, at 32 percent, and large foundations, at 41 percent. All foundation revenues, other than contributions received, are assigned to one of three categories on the “Analysis of Income Producing Activities” schedule of Form 990-PF. The first category, “unrelated business income” (UBI), was taxable income from a trade or business that was regularly carried on by the organization but was not substantially related to the foundation’s exempt purpose or function, other than to provide income. Organizations with unrelated business income were required to file Form 990-T [13]. Private foundations reported $179 million in unrelated business income for 1999, less than 1 percent of total revenue. Unrelated business income was reported by less than 5 percent of all private foundations. Revenue categorized as “excluded income” was not directly related to the tax-exempt, charitable function of the foundation, but was exempted or excluded from the tax on unrelated business income by IR Code sections 512, 513, or 514. Included in this category are dividends, interest, rental income, and gains from sales of investment assets. Excluded income totaled $41.4 billion for 1999, 93 percent of total income as reported on the “Analysis of Income Producing Activities” schedule. Income that was directly related to the function or purpose for which the organization has received tax-exemption was classified as “related or exempt function income.” Nearly 7 percent, or $2.9 billion, of the income reported on the “Analysis of Income Producing Activities” schedule was categorized as exempt income. ExciseTaxonInvestmentIncome In accordance with TRA69, private foundations pay excise tax on their investment income each year. This tax is intended to cover expenses incurred by the IRS in the oversight of foundation activities and the enforcement of laws governing their exempt status. Generally, domestic foundations are taxed at a rate equal to 2 percent of their worldwide net investment income. Domestic operating foundations that are able to show a significant amount of public support and control may be exempt from the tax on net investment income. For 1999, 15 percent of all operating foundations met the requirements for exemption from the tax [14]. Under the Deficit Reduction Act of 1984, a domestic nonoperating foundation may be eligible for a reduction of the tax to 1 percent of net investment income in cases where the foundation is able to show a specific degree of improvement in the rate at which it paid out charitable dollars. Specifically, if current “qualifying distributions” exceeded a 5-year average 141 Domestic Private Foundations and Charitable Trusts, 1999 Figure D Sources of Domestic Private Foundation Revenue, by Asset-Size Class, 1999 All Foundations 2% 3% 46% $83.3 Billion 37% 11% Small Foundations 1 Medium Foundations 2 3 Large Foundations 142 $4.0 Billion Contributions, gifts, and grants received Dividends and interest from securities $55.1 Billion $24.2 Billion Net gain (less loss) from sales of assets Other interest Other income 1 Small foundations are those holding from zero (including unreported) to less than $1,000,000 in fair market value of total assets. 2 Medium foundations are those holding from $1,000,000 to less than $50,000,000 in fair market value of total assets. 3 4 5 5 4 Large foundations are those holding $50,000,000 or more in fair market value of total assets. Represents "Interest on savings and temporary cash investments," as reported on Form 990-PF. Includes "Gross rents and royalties" and "Gross profit (or loss) from business activities" as reported on Form 990-PF, as well as items such as imputed interest on deferred payments and program-related investment income. NOTE: Detail may not add to 100 percent because of rounding and processing tolerances. 142 Domestic Private Foundations and Charitable Trusts, 1999 of qualifying distributions plus 1 percent of current net investment income, a foundation qualified for the reduced tax rate for 1999. Data for domestic foundations reporting excise tax on net investment income for 1999 are presented in Figure E. Net investment income rose to $57.1 billion, and foundations reported $730 million in excise tax on net investment income. The majority of domestic foundations, 58 percent, paid this excise tax at the higher 2-percent rate. However, since 58 percent of large foundations took advantage of the reduced tax rate compared to only 36 percent of small foundations, the amount of net investment income tax reported was nearly equal, at $365 million, for both the 1- and 2-percent tax rates. FoundationAssetsandInvestments Total fair market value of foundation assets reached $466.9 billion for 1999, increasing 18 percent from 1998. Total investments grew by 17 percent to $444.2 billion. Foundations held the majority of their assets, 95 percent, in investments. This category of assets includes savings and temporary cash investments, securities (corporate stock and bonds and Government obligations), and “other investments.” The “other investments” category represents an aggregation of several line items, and includes such items as investments in land, buildings, and equip- ment; mortgage loans; and additional items such as advances, certificates of investment, and investments in art, gold, coins, and gems. Slightly less than 78 percent of all assets, $363.4 billion, were held in securities, investments that increased 14.3 percent over the prior year. Corporate stock holdings increased 14 percent and accounted for 64 percent of total investments. Investments in corporate bonds increased at a rate of 14 percent, while Government obligations rose 20 percent, rebounding from the prior year’s decrease. CompositionofInvestmentAssetsbySizeof Foundation Since foundations, in varying degrees, use income from investments to finance their grants and disbursements, asset growth figures prominently in creating the financial basis for private foundationcharitable giving. Foundations may choose the manner in which they manage and invest their assets. Investments in corporate stock are considered to be high-risk, but also provide higher returns in the long run, while short-term investments, such as temporary cash investments, have little risk but less return. Large foundations generally invest extensively in corporate stock and other long-term investments and relatively little in short-term investments, while small and medium foundations, though still holding large Figure E Domestic Private Foundations Reporting Excise Tax on Investment Income, by Asset-Size Class, 1999 [Money amounts are in millions of dollars.] Item Total Small foundations ¹ (1) (2) Medium foundations ² Large foundations ³ (3) (4) Number of foundations reporting excise tax........................................................................................................... 51,221 30,713 Percentage of all foundations........................................................................................................... 82 75 19,480 95 1,029 96 12,816.8 192.5 40,897.7 520.8 4.0 12.5 64.0 128.5 297.1 223.7 36 64 51 49 58 42 4 Net investment income (NII) ........................................................................................................... 54,744.3 1,029.8 Excise tax........................................................................................................... 729.9 16.5 1-percent tax........................................................................................................... 365.2 2-percent tax........................................................................................................... 364.7 Percentage reporting excise tax rate: 1-percent tax............................................................................................... 42 2-percent tax............................................................................................... 58 ¹ Small foundations are those holding from zero (including unreported) to less than $1,000,000 in fair market value of total assets. ² Medium foundations are those holding from $1,000,000 to less than $50,000,000 in fair market value of total assets. ³ Large foundations are those holding $50,000,000 or more in fair market value of total assets. Represents net investment income of foundations reporting excise tax. Total net investment income for all foundations was $57.1 billion. 4 143 Domestic Private Foundations and Charitable Trusts, 1999 portions of their assets in corporate stock, are more likely than large foundations to hold a significant amount of their portfolios in short-term investments. Figure F shows the composition of investment assets for all foundations, by size of foundation. Corporate stock was the major investment asset for each size category of foundation for 1999. Small foundations held 53 percent of their investment assets in corporate stock, medium foundations held 61 percent, and large foundations held 65 percent. Savings and temporary cash investments, the category representing short-term investments, represented 19 percent of investment assets for small foundations and only 7 percent for large foundations. 144 144 IncomeYieldsandRatesofTotalReturn An income yield is a measure of the realized investment income that a foundation earns on its investment assets. Figure G shows median “net investment income yields” and “rates of total return on assets” for domestic nonoperating foundations, by asset-size class, for 1999. Both the mean and the median, which minimizes the influences of large outliers in the data and may therefore better represent a typical foundation than the mean value, are calculated. The net investment income (NII) yield was calculated by dividing net investment income by the end-of-year fair market value of investment assets [15]. As in previous years, large foundations earned higher median income yields for 1999 than other size classes, while small foundations earned the smallest median yields. This may indicate that large foundations typically invest in higher-risk investment assets with the potential for greater return, while smaller foundations invest more cautiously, perhaps because they have fewer resources to expend toward investment management. Further insight into foundation investment return can be gained by examining data for the rate of total return on assets. This measure, which represents the total capital appreciation of the endowment of a foundation, is a more comprehensive indication of total investment performance than the NII yield. The rate-of-total-return formula used here measures the change in the value of the entire asset base with consideration for inflows and outflows of money, such as contributions received and grants paid [16]. It measures the realized income from investments and other assets, as well as the unrealized apprecia- tion or depreciation in the fair market value of assets. Like net investment income yields, rates of total return generally increase with foundation size, indicating that rates of return on assets increase as asset holdings grow. Median rates of return for 1999 were higher than net investment income yields for both medium and large foundations. CharitablePayoutRequirementandQualifying Distributions The charitable payout requirement applies to nonoperating foundations only and refers to the requirement, under the Economic Recovery Tax Act of 1981, that these foundations distribute a specific amount annually for charitable purposes. Each year, nonoperating foundations must calculate a “distributable amount,” based on the fair market value of their investment assets, which must be disbursed by the end of the next reporting year in order to avoid being taxed on the undistributed amount. The distributable amount, or required payout amount, equals 5 percent of the fair market value of the organization’s net investment assets (the “minimum investment return”), after certain allowed or required adjustments [17]. The charitable payout requirement may be fulfilled by a combination of “qualifying distributions” from the current year and carryovers (distributions paid in excess of the minimum required amount) from the previous 5 years. Qualifying distributions and their components, along with distributable amounts, are shown for all asset-size classes in Figure H. Data on qualifying distributions for 1999 are presented in more detail than those published in previous articles. Qualifying distributions for nonoperating foundations totaled $25.1 billion for 1999, an 18-percent increase from 1998, and outpaced the required distributable amount, which rose by 16 percent to $18.3 billion. Small foundations, which generally concentrate their efforts on current rather than long-term charitable giving, exceeded the distributable amount to the greatest degree, with the smallest foundations surpassing the requirement by the largest margin. Large foundations increased their qualifying distributions by 24 percent, medium foundations by 19 percent, and small foundations by 16 percent. For 1999, contributions and grants composed more than 89 percent of qualifying distributions, followed by operating and administrative expenses, at 8 percent. Additionally, “set- Domestic Private Foundations and Charitable Trusts, 1999 Figure F Composition of Domestic Private Foundation Investment Assets, by Asset-Size Class, 1999 All Foundations 11% 8% 8% $444.2 Billion 10% 64% Small Foundations¹ Medium Foundations² Large Foundations³ $9.3 Billion $120.0 Billion $314.9 Billion Corporate stock Government obligations Savings and temporary cash investments Corporate bonds 4 Other investments ¹ Small foundations are those holding from zero (including unreported) to less than $1,000,000 in fair market value of total assets. ² Medium foundations are those holding from $1,000,000 to less than $50,000,000 in fair market value of total assets. ³ Large foundations are those holding $50,000,000 or more in fair market value of total assets. 4 Sum of "Investments in land, buildings, and equipment (less accumulated depreciation)," "Investments in mortgage loans," and "Other investments," as reported on the Form 990-PF. "Other investments" includes items such as advances; certificates of investment; and investments in art, coins, gold, and gems. NOTE: Amounts of investment assets are shown in fair market value. 145 Domestic Private Foundations and Charitable Trusts, 1999 Figure G Domestic Nonoperating Private Foundation Net Investment Income Yields and Rates of Total Return on Assets, by Size of Fair Market Value of Total Assets, 1999 Asset size Net investment income yields Rates of total return Median Mean Median Mean (1) (2) (3) (4) 20.3 3.3 5.8 Less than $100,000................................................................................4.4 5.9 -0.3 -4.3 $100,000 under $1,000,000................................................................................ 5.6 12.3 4.0 3.8 $1,000,000 under $10,000,000................................................................................... 6.3 40.7 6.9 10.4 $10,000,000 under $50,000,000................................................................................... 7.2 21.8 9.0 12.6 $50,000,000 under $100,000,000...................................................................................... 7.9 15.4 10.7 16.2 $100,000,000 or more...................................................................................... 9.2 12.5 20.6 Percentages Total................................................................................................... 5.6 Small foundations: Medium foundations: Large foundations: 146 146 asides” for future charitable distributions, programrelated investments, such as loans to other 501(c)(3) organizations, and amounts paid to acquire buildings, equipment, supplies or other assets for charitableuse, each accounted for 1 percent of total qualifying distributions. Of those foundations with a minimum payout requirement, 62 percent met or exceeded the requirement for 1999 in that reporting year. Those foundations that did not meet this requirement had until the end of the following reporting year to distribute the remaining amount. As the annual payout amount is not calculated until the end of the reporting year and is based on the monthly average of investment assets, many foundations choose to take advantage of the 1year tax-free “grace period” for making these distributions and report these amounts as “undistributed income.” More than half of all large foundations chose to wait until the following year to fulfill the requirement; 46 percent of medium and 33 percent of small foundations also elected to meet the 1999 distribution requirement in Reporting Year 2000. The payout rate, which is the amount of (adjusted) qualifying distributions divided by the amount of the average monthly value of net investment assets, provides insight into the degree to which foundations meet their charitable payout requirement [18]. Median and mean payout rates for 1999, by size of foundation, are displayed in Figure I. The mean payout rates, 11.7 which far exceed the required amount for small foundations, illustrate the degree to which smaller foundations exceeded their larger counterparts in meeting the payout requirement. While median payout rates were at or near the required 5 percent for most asset-size classes, the smallest foundations, with a median rate of 11.5 percent, more than doubled the required rate. Undistributed income for 1998 was generally taxed at a rate of 15 percent at the end of Reporting Year 1999 [19]. In some cases, including 5-year “startup” periods for new foundations and certain types of organizational transitions or terminations, 1998 undistributed income was not subject to the excise tax. Figure J shows undistributed income for 1998, as reported on both the 1998 and 1999 returns, by asset-size class. Of the $5.2 billion in undistributed income reported for 1998, only $46 million, or 0.9 percent, still had not been distributed by the end of the grace period. In cases where undistributed income was subject to the excise tax, private foundations used Form 4720 to report and pay any amounts due. Section4947(a)(1)NonexemptCharitableTrusts DefinitionandOverview Unlike section 501(c)(3) organizations such as private foundations, charitable trusts described under Internal Revenue Code section 4947(a)(1) are not formally Domestic Private Foundations and Charitable Trusts, 1999 Figure H Domestic Nonoperating Private Foundations Qualifying Distributions and Distributable Amount, by Size of Fair Market Value of Total Assets, 1999 [Money amounts are in millions of dollars] Qualifying distributions Asset size Total Charitable grants Operating expenses (1) (2) (3) (4) (5) (6) 22,334.5 2,032.9 181.7 292.8 215.0 Total............................................................................. 25,056.9 Set-asides Program-related Amounts paid to investments acquire assets Distributable amount (7) 18,273.7 Small foundations: Less than $100,000 .................................................................................. 269.8 246.3 23.5 -- -- -- 23.1 $100,000 under $1,000,000.................................................................................. 1,540.4 1,288.0 212.7 27.0 12.7 -- 411.9 $1,000,000 under $10,000,000.................................................................................. 4,092.6 3,674.0 358.3 15.0 39.3 5.9 2,191.6 $10,000,000 under $50,000,000.................................................................................. 4,696.0 4,298.8 272.1 18.4 39.0 67.7 2,982.0 Medium foundations: Large foundations: $50,000,000 under $100,000,000.................................................................................. 1,960.5 1,792.8 124.3 $100,000,000 or more.................................................................................. 12,497.6 11,034.6 1,042.0 0.6 15.3 27.4 1,413.4 120.7 186.4 113.9 11,251.8 1.2 0.9 N/A Percentage of total Percentage of qualifying distributions............................................................................. 100.0 89.1 8.1 0.7 Small foundations: Less than $100,000 .................................................................................. 100.0 91.3 8.7 -- -- -- N/A $100,000 under $1,000,000.................................................................................. 100.0 83.6 13.8 1.8 0.8 -- N/A $1,000,000 under $10,000,000.................................................................................. 100.0 89.8 8.8 0.4 1.0 0.1 N/A $10,000,000 under $50,000,000.................................................................................. 100.0 91.5 5.8 0.4 0.8 1.4 N/A $50,000,000 under $100,000,000.................................................................................. 100.0 91.5 6.3 (¹) 0.8 1.4 N/A $100,000,000 or more.................................................................................. 100.0 88.3 8.3 1.0 1.5 0.9 N/A Medium foundations: Large foundations: N/A--Not applicable. ¹ Amount is less than 0.05 percent. NOTE: Detail may not add to totals due to rounding. recognized by the Internal Revenue Service as taxexempt. These organizations resemble private foundations in that they have exclusively charitable purposes, have narrow bases of support and control, and are required to file Form 990-PF. Generally, these types of organizations are supported and controlled by an individual or family. Any income, which is not distributed for charitable purposes, is annually subject to tax and is reported on Form 1041, Fiduciary Income Tax Return, for which no data are included in this article. Also not covered in this article are publiclysupported section 4947(a)(1) charitable trusts and split-interest trusts. Publicly-supported section 4947(a) (1) charitable trusts, which receive the majority of their support from public (rather than private) sources, file Form 990. These trusts typically operate in connection with, and provide support to, one or more public charities. Entities known as split-interest trusts, which have both charitable and noncharitable beneficiaries, complete Form 5227, Split-Interest Trust Information Return [20]. As with private foundations, data for charitable trusts organized abroad but required to file Form 990-PF are not included in this article. Section 4947(a)(1) charitable trusts represented only 4 percent of Forms 990-PF filed for 1999. These organizations filed 2,805 returns, 5 percent more than for 1998. Data on the number of returns filed, as well as asset, revenue, and expense items for 1998 and 1999, are shown in Figure K. Of these organizations, 96 percent were classified as nonoper147 Domestic Private Foundations and Charitable Trusts, 1999 Figure I Domestic Nonoperating Private Foundation Payout Rates, by Size of Fair Market Value of Total Assets, 1999 Asset size Median payout rates (percentages) Total..................................................................................... 5.7 Mean payout rates (percentages) 88.4 Small foundations: Less than $100,000..................................................................................... 11.5 305.0 throughout the remainder of this article: “small charitable trusts” refers to the group holding less than $1 million in fair market value of total assets (including trusts that either do not report assets or that report assets equal to zero), “medium-size charitable trusts” refers to the group holding from $1 million to less than $10 million in assets, and “large charitable trusts” refers to the group holding $10 million or more in assets. On average, medium and large-sized trusts are much smaller than foundations in those size groups. $100,000 under $1,000,000..................................................................................... 5.4 23.6 CharitableTrustsRevenueandAssets Total revenue reported by charitable trusts grew by 5 percent to $609 million for 1999. Contributions Large foundations: received, net gain from sale of assets, and dividends $50,000,000 under $100,000,000..................................................................................... 5.0 9.5 and interest from securities comprised 92 percent of $100,000,000 or more..................................................................................... 5.0 6.7 that amount. Contributions received fell by 15 percent, while net gain from sales of assets and dividends and interest from securities gained 13 Figure J percent and 2 percent, respectively. Net gain from sales of assets, at 51 percent, represented the largest component of charitable trust Domestic Nonoperating Private Foundations: revenue, as shown in Figure L. Dividends and 1998 Undistributed Income Remaining interest from securities, at 23 percent, and contribuUndistributed by 1999, by Size of Fair Market tions, gifts, and grants received, at 18 percent, constiValue of Total Assets tuted the majority of additional revenue. [Money amounts are in millions of dollars] Net investment income totaling $488 million was 1998 Undistributed income reported for 1999. Like foundations, most charitable trusts are required to pay an excise tax on their net 1998 return 1999 return Asset size investment income. For 1999, $7 million in excise Number Number Amount Amount tax were reported by charitable trusts filing Form of returns of returns 990-PF. Of the charitable trusts that paid this tax, 37 (1) (2) (3) (4) percent qualified for the reduced rate of 1 percent, Total.............................................................. 20,211 5,206.2 3,214 45.9 while most others paid tax of 2 percent on net investSmall foundations: ment income. Less than $100,000.............................................................. 4,028 4.5 1,204 0.8 For 1999, assets held by charitable trusts totaled $100,000 under $1,000,000.............................................................. 7,796 95.9 1,598 6.7 $5.3 billion, a 4-percent increase from 1998. Small Medium foundations: charitable trusts, which accounted for 72 percent of $1,000,000 under $10,000,000.............................................................. 6,558 591.5 370 19.9 returns filed, represented only 11 percent of total $10,000,000 under $50,000,000.............................................................. 1,372 827.3 38 5.9 asset holdings. In contrast, half of total asset holdLarge foundations: $50,000,000 under $100,000,000.............................................................. 220 455.3 --ings were reported by large trusts, which represented $100,000,000 or more.............................................................. 237 3,231.7 4 12.7 just 3 percent of these organizations. Like private foundations, charitable trusts hold ating. Additionally, 86 percent made contributions, the majority of assets as investments. More than 97 gifts, or grant for 1999 and were thus categorized as percent of charitable trust assets were held as investgrantmaking. ments for 1999, the majority of which were investThe following classifications apply, unless otherments in securities. The composition of charitable wise indicated, to the discussion of charitable trusts trust investment assets is shown in Figure M. HoldMedium foundations: $1,000,000 under $10,000,000..................................................................................... 5.2 12.8 $10,000,000 under $50,000,000..................................................................................... 5.1 13.7 148 148 Domestic Private Foundations and Charitable Trusts, 1999 Figure K Domestic IRC Section 4947(a)(1) Charitable Trusts: Selected Financial Items and Percentage Changes, 1998-1999 [Money amounts are in millions of dollars] Percentage Item 1998 1999 1 change, 1998-1999 (1) Number of trusts............................................................................................................................. (2) 2,805 5.2 Total assets (fair market value)............................................................................................................................. 5,108.5 Cash (non-interest bearing accounts)............................................................................................................................. 27.8 5,326.6 31.9 4.3 14.7 Investments, total............................................................................................................................. 4,988.0 Savings and temporary cash investments............................................................................................................................. 289.8 5,193.1 264.4 4.1 -8.8 Investments in securities, total............................................................................................................................. 4,039.3 Government obligations............................................................................................................................. 503.5 4,195.1 490.2 3.9 -2.6 Corporate stock.............................................................................................................................2,841.6 Corporate bonds............................................................................................................................. 694.1 2,974.1 730.8 4.7 5.3 Other investments ²............................................................................................................................. 658.9 733.6 11.3 Total revenue............................................................................................................................. 2,667 (3) 609.3 4.9 Contributions, gifts, and grants received............................................................................................................................. 128.6 Net gain (less loss) from sales of assets............................................................................................................................. 277.3 108.8 313.7 -15.4 13.1 Dividends and interest from securities............................................................................................................................. 136.2 139.5 2.4 281.5 -9.5 228.3 -11.2 Total expenses............................................................................................................................. 580.8 310.9 Contributions, gifts, and grants paid ............................................................................................................................. 257.2 ¹ Amounts exclude one large outlier, which was classified as a charitable trust at the time of data collection, but was later reclassified as a private foundation. ² Sum of "Investments in land, buildings, and equipment (less accumulated depreciation)," "Investments in mortgage loans," and "Other investments," as reported on the Form 990-PF. "Other investments" includes items such as advances and certificates of investment. ings in corporate stock, which increased 5 percent from 1998, represented 58 percent of total investment holdings. Investments in corporate bonds and “other investments” each composed 14 percent of total investment assets. The latter category includes investments in land, buildings, and equipment; investments in mortgage loans; advances; and certificates of investment. CharitableTrustDistributions There were $228 million in contributions, gifts, and grants paid by section 4947(a)(1) trusts for 1999, 11 percent less than for 1998. Nonoperating charitable trusts paid out $242 million in qualifying distributions, 94 percent of which consisted of grants. Small and medium charitable trusts distributed more than the required distributable amounts, at 19 percent and 2 percent, respectively, while large trusts distributed 5 percent less than the required amount. DataSourcesandLimitations The statistics in this article are based on a sample of Reporting Year 1999 Forms 990-PF that were filed with the Internal Revenue Service. Organizations having accounting periods beginning in 1999 (and therefore ending between December 1999 and November 2000) were required by IRS to file Form 990-PF. Some part-year returns were included in the samples for organizations that changed their accounting periods or filed initial or final returns. Some 66 percent of the domestic private foundations in the sample had accounting periods covering Calendar Year 1999 or, in some cases, part-year periods that ended in December 1999. For domestic charitable trusts, 61 percent filed calendar year returns. The 1999 sample was stratified, based on both the size of fair market value of total assets and the type of organization (either a private foundation or a 4947(a)(1) charitable trust). Foundation returns were selected at rates that ranged from approximately 0.3 percent (for the more numerous but very small asset-size returns) to 100 percent (for the relatively few returns with large amounts of assets). Charitable trust returns were selected at rates that ranged from 1.3 percent to 100 percent. The 8,045 returns in the sample (7,039 foundations and 1,006 trusts) were drawn from an estimated population of 65,254 foundations and 3,113 149 Domestic Private Foundations and Charitable Trusts, 1999 Figure L Sources of Domestic Charitable Trust Revenue, 1999 4% 4% 18% foundations in the sample that were incorrectly selected as trusts were ultimately re-classified as foundations (for the statistics) using identification codes from the IRS Exempt Organization Master File. However, the weights used for these organizations Figure M Composition of Domestic Charitable Trust Investment Assets, 1999 $609.3 Million 1 14% 23% 5% 51% 9% $5.2 Billion 150 Contributions, gifts, and grants received Net gain (less loss) from sales of assets Dividends and interest from securities Other interest Other income 2 3 ¹ Total revenue excludes one large outlier, which was classified as a charitable trust at the time of data collection, but was later reclassified as a private foundation. ² Represents "Interest on savings and temporary cash investments," as reported on Form 990-PF. ³ Includes "Gross rents and royalties" and "Gross profit (or loss) from business activities" as reported on Form 990-PF, as well as items such as imputed interest on deferred payments and program-related investment income. trusts. The magnitude of sampling error, measured by coefficients of variation for selected items, is shown in Figure N. The samples were designed to provide reliable estimates of total assets and total revenue. To accomplish this, 100 percent of foundation returns with fair market asset value of $10 million or more and 100 percent of charitable trust returns with fair market asset value of $1 million or more were included in the samples, since these returns represented the vast majority of financial activity. The populations and sample rates and sizes for each asset-size class are shown in Figure O. Efforts were made to verify that organizations selected for the sample were properly classified as foundations or trusts. The relatively few 150 58% 14% Corporate stock Corporate bonds Savings and temporary cash investments Government obligations Other investments¹ ¹ Sum of "Investments in land, buildings, and equipment (less accumulated depreciation)," "Investments in mortgage loans," and "Other investments," as reported on the Form 990-PF. "Other investments" includes items such as advances and certificates of investment. NOTE: Amounts of investment assets are shown in fair market value. Figure N Coefficients of Variation for Selected Items, by Type of Organization, 1999 Item Private foundations Charitable trusts Coefficients of variation (percentages) Total assets (fair market value)............................................................................................... 0.10 0.46 Total revenue............................................................................................... 0.83 0.96 Total expenses............................................................................................... 1.40 2.24 Domestic Private Foundations and Charitable Trusts, 1999 Figure O Populations, Sample Rates, and Sample Sizes, by Type of Organization and Size of Fair Market Value of Total Assets, 1999 Asset size Population ¹ (1) Grand total............................................................................................................ 68,367 Sample rate Sample (percentage) (2) size (3) -Private foundations Total............................................................................................................ 65,254 Under $125,000............................................................................................................ 21,977 $125,000 under $400,000............................................................................................................ 11,303 $400,000 under $1,000,000............................................................................................................ 10,322 $1,000,000 under $2,500,000............................................................................................................ 9,055 $2,500,000 under $10,000,000............................................................................................................ 7,975 $10,000,000 under $25,000,000............................................................................................................ 2,541 $25,000,000 or more............................................................................................................ 2,081 -0.3 0.8 1.9 4.1 21.0 100.0 100.0 8,045 7,039 73 95 200 373 1,676 2,541 2,081 Charitable trusts Total............................................................................................................ 3,113 Under $100,000............................................................................................................ 909 $100,000 under $1,000,000............................................................................................................ 1,401 $1,000,000 or more............................................................................................................ 803 -1.3 13.6 100.0 1,006 12 191 803 ¹ Population figures may not match the data published in other tables and figures because certain returns were rejected or reclassified during data entry. Refer to the Data Sources and Limitations section for additional information. were based on the original sample selection classification. These same methods were used for the trusts that were incorrectly sampled as foundations. Approximately 7 percent of all foundations, including those reclassified as foundations, reported $10 million or more in fair market value of total assets for 1999. While these foundations were selected at a rate of 100 percent, the remaining foundation population was randomly selected for the sample at various rates of less than 100 percent depending on asset size: 0.3 percent for returns with assets zero, unreported, or less than $125,000; 0.8 percent for returns with assets of $125,000 to less than $400,000; 1.9 percent for returns with assets of $400,000 to less than $1 million; 4.1 percent for returns with assets of $1 million to less than $2.5 million; and 21.0 percent for returns with assets of $2.5 million to less than $10 million. Approximately 26 percent of all 4947(a)(1) charitable trusts reported $1 million or more in fair market value of total assets for 1999. While these trusts were selected at a rate of 100 percent, the remaining trust population was randomly selected for the sample at various rates of less than 100 percent depending on asset size: 1.3 percent for returns with assets zero, unreported, or less than $100,000; and 13.6 percent for returns with assets of $100,000 to less than $1 million. The population from which the 1999 sample was drawn consisted of Form 990-PF records posted to the IRS Business Master File during 1999 and 2000. Some of the records designated were for organizations that were deemed inactive or terminated and are not reflected in the estimates. The data presented were obtained from returns as originally filed with IRS. In most cases, changes made to the original return because of administrative processing, audit procedures, or a taxpayer amendment were not captured in the statistics. The data were subject to comprehensive testing and correction procedures in order to ensure statistical reliability and validity. Some returns, though initially included in the sample, were “rejected” during the data entry process for various reasons, such as duplicate filing or uncorrectable taxpayer error. A general discussion of the reliability of estimates based on samples, methods for evaluating both the magnitude of sampling and non-sampling error, and the precision of sample estimates can be found in the general Appendix to this issue of the SOI Bulletin. ExplanationofSelectedTerms The following explanations describe terms as they applied to both private foundations and charitable trusts for 1999. Unless otherwise indicated, all references to foundations also apply to trusts. 151 Domestic Private Foundations and Charitable Trusts, 1999 152 152 Assets Zero or Unreported.--This asset-size category included: (1) final returns of liquidating or dissolving foundations that had disposed of all assets; (2) returns of those foundations reporting zero endof-year assets that had apparently distributed (or disposed of) all assets received during the year; and (3) returns of those foundations that did not report assets. A liquidating or dissolving foundation is required to transfer its assets on to another foundation or to a public charity. Capital Gain Net Income.--This is the amount of net gains from sales or dispositions of property used for investment purposes (property used for charitable purposes was excluded). Capital losses from the sale or other disposition of property could be subtracted from capital gains only to the extent of such gains. Capital gain net income was used in the computation of “net investment income” (on which an excise tax generally had to be paid). In contrast, the net gain (or loss) per the books from the sale of all assets (other than inventory), including those used for both investment and charitable purposes, was reported as “net gain (or loss) from the sale of assets” on Form 990-PF, Part I, line 6, column (a). This item, capital gain net income, was reported on Form 990-PF, Part I, line 7, column (b). Charitable Trust.--A charitable trust, also referred to as a “nonexempt” charitable trust, is defined in Internal Revenue Code section 4947(a)(1) as an organization (1) that is not considered tax-exempt under section 501(a); (2) that has exclusively charitable interests; and (3) that has amounts in trust for which donors are allowed to claim a tax deduction for charitable contributions. Nonexempt charitable trusts that are not publicly supported are subject to the excise tax provisions that apply to private foundations and are required to file the same Form 990-PF. (“Publicly supported” nonexempt charitable trusts are required to file Form 990, Return of Organization Exempt From Income Tax, and are, therefore, not included in these statistics.) Nonexempt charitable trusts that are treated as private foundations must pay an annual tax on income (usually from investments) that is not distributed for charitable purposes, and they must report such income and tax on Form 1041, U.S. Fiduciary Income Tax Return. Data from this form are not included in this article. Disbursements for Exempt Purposes.--These deductions comprised the largest component of “qualifying distributions” and included grants paid, operating expenses, and necessary and reasonable administrative expenditures for activities that were directly related to the tax-exempt purposes of the foundation. These amounts were determined solely based on the cash receipts and disbursements method of accounting, as required by law and regulations. This item was reported on Form 990-PF, Part I, line 26, column (d). Disqualified Person.--In general, a disqualified person is a substantial contributor; a foundation manager; a person who owns more than 20 percent of a corporation, partnership, trust, or unincorporated enterprise that is itself a substantial contributor; or a family member of one of the types of disqualified persons described above. Distributable (Payout) Amount.--This is the minimum payout amount that was required to be distributed by nonoperating foundations by the end of the year following the year for which the return was filed. Failure to distribute income within this period resulted in a 15-percent excise tax on the undistributed portion. The distributable amount was computed as 5 percent of net investment assets, called the “minimum investment return,” minus the excise tax on net investment income and the income tax under Subtitle A, plus or minus other adjustments, either allowed or required (see Net Adjustments to Distributable Amount in this section). Excess Distributions Carryover.--This is the amount distributed, after fulfilling the charitable payout requirement, which equaled the excess of qualifying distributions for 1999 over the distributable amount. If necessary, excess amounts from the current year could be carried forward to be applied to the distributable amount for the 5 following years. This item was reported on Form 990-PF, Part XIII, line 9. Grantmaking Foundations (and Charitable Trusts).--For the statistics in this article, grantmaking foundations and trusts are those organizations that reported $1 or more in contributions, gifts, and grants paid for charitable purposes on Form 990-PF, Part I, line 25, column (d). Inventories.--The value of materials, goods, and supplies purchased or manufactured by the organization and held for sale or use in some future period is included in this item. This item was reported on Form 990-PF, Part II, line 8, columns (a) beginning- Domestic Private Foundations and Charitable Trusts, 1999 of-year book value, (b) end-of-year book value, and (c) end-of-year fair market value. Land, Buildings, and Equipment, Charitableuse.--This represents either the book value (less accumulated depreciation) or fair market value of all land, buildings, and equipment not held for investment purposes and used by the organization in conducting its charitable activities. This item was reported on Form 990-PF, Part II, line 14, columns (a) beginningof-year book value, (b) end-of-year book value, and (c) end-of-year fair market value. Land, Buildings, and Equipment, Investmentuse.--This represents either the book value (less accumulated depreciation) or fair market value of all land, buildings, and equipment held for investment purposes, such as rental properties. This item was reported on Form 990-PF, Part II, line 11, columns (a) (beginning-of-year book value), (b) (end-of-year book value), and (c) (end-of-year fair market value). Minimum Investment Return.--This is the aggregate fair market value of assets not used for charitable purposes, less both the indebtedness incurred to acquire these assets and the cash held for charitable activities, multiplied by 5 percent. The minimum investment return was used as the base for calculating the “distributable amount.” This item was reported on Form 990-PF, Part X, line 6. Net Adjustments to Distributable Amount.-Adjustments that increased the “distributable amount” consisted of increases attributable to the income portion (as distinct from the principal portion) of distributions from split-interest trusts on amounts placed in trust after May 26, 1969. Trusts with “splitinterests” are those that have both charitable and noncharitable beneficiaries. These organizations file Form 5227, Split-Interest Trust Information Return. Recoveries of amounts previously treated as qualifying distributions also had to be added back to the distributable amount. Adjustments that decreased the distributable amount were the result of income required to be accumulated by the terms of an organization’s governing instrument. These adjustments were allowed only for foundations or trusts organized before May 27, 1969, whose governing instrument continued to require such accumulation, because State Courts would not allow the organization to change its governing instrument. These items were reported on Form 990-PF, Part XI, lines 4a, 4b, and 6. Net Gain (or Loss) from Sales of Assets.-Profits and losses from sales of items such as securities, land, buildings, or equipment are included in this item. Gain or loss reflected the amount shown on the books of the foundation and included any amount from the sale of property used for either investment or tax-exempt charitable purposes. Most of the gain or loss was from sales of stocks and bonds. Profit or loss from the sale of inventory items was not included in this item, but was rather included in gross profit (loss) from business activities. This item was reported on Form 990-PF, Part I, line 6, column (a). Net Investment Assets (Noncharitable-use Assets).--This item was reported on Form 990-PF, Part X, line 5 and is the basis for “minimum investment return.” For purposes of calculating the “minimum investment return,” only the average (as calculated monthly), rather than end-of-year, fair market value of assets that were not used or held for use for charitable purposes enters into the computation. An asset was considered an investment asset if it was not used in carrying out a charitable, educational, or other similar function which gave rise to the taxexempt status of the foundation. Examples include the fair market value of securities and rental property owned by the foundation for investment purposes. This item differs from the asset amounts reported on the balance sheet in Part II of Form 990-PF, which included end-of-year values for both investment and charitable-use assets. Net Investment Income.--This is the amount by which the sum of gross investment income plus realized capital gain net income exceeds allowable deductions. Included in investment income were interest, dividends, capital gain net income, rents, payments with respect to securities loans (as defined in Code section 512(a)(5)), and royalties. Any investment income derived from unrelated trade or business activities that were subject to the “unrelated business income” tax reported on Form 990-T, Exempt Organization Business Income Tax Return, was excluded. This item was reported on Form 990PF, Part I, line 27b, column (b). Nonoperating Foundations (and Charitable Trusts).--These are organizations that generally carried on their charitable activities in an indirect manner by making grants to other organizations directly engaged in charitable activities, in contrast to operating foundations and trusts that engaged in 153 Domestic Private Foundations and Charitable Trusts, 1999 154 154 charitable activities themselves. However, some nonoperating foundations and trusts were actively involved in charitable programs of their own, in addition to making grants. Distributions made by one private nonoperating foundation or trust to another qualified toward meeting the nonoperating organization’s distribution requirement. (Distributions made by one nonoperating foundation or trust to another were subject to a number of conditions and restrictions requiring a “pass-through” of the distribution, whereby the donor organization received credit for a qualifying distribution but the donee organization did not.) Nonoperating foundations and trusts were subject to an excise tax (and possible additional penalties) for failure to distribute an annual minimum amount for charitable purposes within a required period. An organization’s status as a nonoperating foundation or trust was indicated on Form 990-PF, Part VII, line 9. Operating Foundations (and Charitable Trusts).--These organizations generally expended their incomes for direct, active involvement in a taxexempt activity, such as operating a library or museum, or conducting scientific research. Operating foundations and trusts were exempted from the income distribution requirement and related excise taxes that were applicable to their nonoperating counterparts. To qualify as an operating foundation or trust for 1999, the organization had to meet both an “income test” and one of three other tests: an “assets test,” an “endowment test,” or a “support test.” A foundation or trust could qualify as operating under the income requirement if it spent at least 85 percent of the lesser of its “adjusted net income” or “minimum investment return” on the direct, active conduct of tax-exempt, charitable activities (as opposed to the payout of grants in support of such programs. To meet the assets test, a foundation or trust had to directly use 65 percent or more of its assets for the active conduct of charitable activities. To meet the endowment test, a foundation or trust had to regularly make distributions for the active conduct of charitable activities in an amount not less than two-thirds of its “minimum investment return.” To meet the support test, a foundation or trust had to regularly receive substantially all of its support (other than from gross investment income) from the public or from five or more qualifying exempt organizations, and (a) no more than 25 percent of its support (other than from gross investment income) from any one such qualifying exempt organization; and (b) no more than 50 percent of its support from gross investment income. Contributions made by individual taxpayers to operating foundations or trusts were deductible on the donors’ income tax returns, up to 50 percent of their “adjusted gross income” (as opposed to 30 percent for contributions to nonoperating foundations). While most operating foundations paid the excise tax on net investment income, 15 percent of operating foundations were exempt from this tax for 1999 under section 4940(d)(2) of the Internal Revenue Code. In order to be exempt, an operating foundation was required to meet the following requirements in any given year: (1) maintain public support for a minimum of 10 taxable years; (2) maintain a governing body at all times that is broadly representative of the general public and that is comprised of no more than 25 percent of disqualified individuals; and (3) at no time during the year include a disqualified individual as an officer of the foundation. An organization’s status as an operating foundation or trust was indicated on Form 990-PF, Part VII, line 9. Other Assets.--This category includes: (1) those assets not allocable to a specific asset item on the Form 990-PF balance sheet or not included elsewhere on the return; and (2) certain amounts given special treatment in the course of statistical processing. The first category included such items as construction reserve land, dividends receivable, escrow deposits, income tax refunds, interest discounts, interest-free loans, overdraft protection, and program-related investments. The second category included atypical amounts reported by the return filer as “negative liabilities.” These items were reported on Form 990-PF, Part II, line 15, columns (a) beginning-of-year book value, (b) end-of-year book value, and (c) end-of-year fair market value. Other Investments.--Investments reported as “other” include such items as advances, bank certificates of deposit, cash values of life insurance, certificates of investment, miscellaneous loan income, and holdings in art, coins, gold, and gems. These items were reported on Form 990-PF, Part II, line 13, columns (a) beginning-of-year book value, (b) end-ofyear book value, and (c) end-of-year fair market value. Private Foundation.--A private foundation is defined in Internal Revenue Code section 501(c)(3) as a nonprofit organization with a narrow source of Domestic Private Foundations and Charitable Trusts, 1999 funds that operated or supported educational, scientific, charitable, religious, and other programs dedicated to improving the general welfare of society. A private foundation qualified for tax-exempt status under Code section 501(c)(3) but was not (1) a church, school, hospital, or medical research organization; (2) an organization with broad public support in the form of contributions or income from taxexempt activities; (3) an organization that was operated by, or in connection with, any of the above described organizations; or (4) an organization that conducted tests for public safety. The primary difference between a private foundation and a public charity was the sources of the organization’s funding. A foundation was typically funded primarily by an individual, a family, or a corporation, while a public charity received its funds from a large number of sources among the general public. Qualifying Distributions.--Qualifying distributions include disbursements for charitable purposes (grants, direct expenditures to accomplish charitable purposes, and charitable-purpose operating and administrative expenses); amounts paid to acquire assets used directly to accomplish tax-exempt functions; charitable program-related investments; and amounts set aside for future charitable projects. Qualifying distributions could be credited against the foundation or trust’s obligation to pay out its “distributable amount.” This item was reported on Form 990-PF, Part XII, line 4. Rate of Total Return.--The formula for the rate of total return was calculated as follows: Rate of Total Return = [Ending Fair Market Value of Assets - Indexed Beginning Fair Market Value of Assets - Contributions Received + Grants Paid + Operating and Administrative Expenses + Excise Tax Paid on Net Investment Income] DIVIDED BY ——————————————————— [Indexed Beginning Fair Market Value of Assets + 50 percent of Contributions Received] To calculate the rate of total return shown in Figure G, samples of private foundation information returns for 1998 and 1999 were matched in order to analyze both the beginning and end-of-year fair market value data. The beginning fair market value of assets for 1999 equals the ending fair market value reported on the 1998 tax return. Thus, in order to provide a consistent form of measurement by which to compare rates of total return among different years, the ending fair market value of asset amounts (reported for both the year subject to the computation and the prior year) were used to compute the rate of return. In order to obtain an inflation-adjusted real rate of return, the figure equaling the beginning-of-year fair market value of assets was indexed, based on the 1996 chain-type price index for Gross Domestic Product as published by the Bureau of Economic Analysis Set-Asides.--Amounts set aside for specific charitable purposes can be treated as qualifying distributions only if the foundation or charitable trust establishes to the satisfaction of the IRS that the amount will be paid for the specific project within 60 months from the date of the first set-aside and if the foundation meets either the suitability test or the cash distribution test. To meet the suitability test, a foundation must receive prior approval from the IRS and must demonstrate that the project can be better accomplished by a set-aside than by an immediate payment of funds. To meet the cash distribution test under IR Code section 4942(g)(2)(B)(ii), a foundation must complete a schedule with its annual return for the year of the set-aside and for each subsequent year until the set-aside amount has been distributed. Set-asides were reported on Form 990-PF, Part XII, lines 3a and 3b. Total Assets.--This is the sum of all assets reported in the foundation’s balance sheet, shown at both book value and fair market value. Total assets were reported on Form 990-PF, Part II, line 16, columns (a) beginning-of-year book value, (b) end-ofyear book value, and (c) end-of-year fair market value. Total Expenses.--This is the sum of contributions, gifts, and grants paid, plus various operating and administrative expenses related to both investment and charitable-purpose activities. Total expense items were reported as shown on the books and records of the foundation and were based on either the cash receipts and disbursement method or the accrual method of accounting. Total expenses were reported on Form 990-PF, Part I, line 26, column (a). 155 Domestic Private Foundations and Charitable Trusts, 1999 156 156 Total Revenue.--This is the sum of gross contributions, gifts, and grants received; interest on savings and temporary cash investments; dividends and interest from securities; net gain (or loss) from sales of assets (mostly investment assets, but also charitable-use assets); gross rents and royalties; gross profit (or loss) from business activities; and other income (such as royalty income, program-related investment income, interest earned on assets used for charitable purposes, and imputed interest on certain deferred payments). These other income items were reported on Form 990-PF, Part I, line 11, column (a). Total revenue items, which included both investment and charitable-use items, were reported as shown on the books and records of the foundation, and were based on either the cash receipts and disbursements method or the accrual method of accounting. Total revenues were reported on Form 990-PF, Part I, line 12, column (a). Undistributed Income.--This is the portion of the required “distributable amount” still undistributed after applying against it the sum of current-year qualifying distributions and any excess distributions carried over from prior years. This item was reported on Form 990-PF, Part XIII, line 6f, column (d). Sanctions were imposed in the form of excise taxes on nonoperating private foundations that did not pay out an amount equal to the “distributable amount” by the end of the following tax year. The tax on undistributed income, imposed on the initial undistributed amount at a 15-percent rate, is reported on Form 4720. Unrelated Business Income (UBI).--This is an exempt organization’s income from a trade or business that was regularly carried on by the organization and that was not substantially related to the performance of the organization’s exempt purpose or function (other than that the organization needed the profits derived from the unrelated activity). The term “trade or business” generally comprised any activity carried on for the production of income from selling goods or performing services. A tax, as reported on Form 990-T, Exempt Organization Business Income Tax Return, is imposed on “unrelated business taxable income (UBTI).” Unrelated business taxable income is gross unrelated business income, less deductions directly connected with carrying on the trade or business, and less certain other deductions. The unrelated business income tax was determined based on the corporate or trust tax rates that were in effect for a given tax year. (Gross) unrelated business income and the associated business codes were reported on Form 990-PF, Part XVI-A, columns (a) and (b). NotesandReferences [1] The amount of contributions, gifts, and grants paid by foundations is based on the amount that foundations actually disbursed for 1999 using the cash receipts and disbursements method of accounting. [2] All of the charitable trusts data presented, with the exception of those shown in Figures N and O, exclude one large outlier. This organization, which was a charitable trust at the time the data were collected but was later reclassified as a private foundation, was included in the 1999 SOI nonexempt charitable trust sample but was excluded from this analysis. [3] For purposes of the analyses, “charitable trusts” refers only to the section 4947(a)(1) charitable trusts that file Form 990-PF, while “private foundations” refers to the section 501(c)(3) private foundations that file Form 990-PF. [4] The data presented in this article are from Forms 990-PF, filed for Reporting Year 1999, by organizations which had accounting periods beginning in 1999. Therefore, the statistics include organizations with accounting periods that ended sometime during the period December 1999 through November 2000. For a more detailed discussion, see the Data Sources and Limitations section. [5] See “Private Foundation” in the Explanation of Selected Terms section for a detailed description of the requirements for Form 990 versus Form 990-PF filers. [6] For an indepth discussion of organizations other than private foundations that are tax-exempt under Internal Revenue Code section 501(c)(3), see Arnsberger, Paul “Charities and Other TaxExempt Organizations, 1999,” Statistics of Income Bulletin , Fall 2002, Volume 22, Number 2. Domestic Private Foundations and Charitable Trusts, 1999 [7] Programs termed “charitable” refer to taxexempt activities that are charitable, educational, scientific, social, literary, or religious in nature. [8] The net value of noncharitable-use assets was reported on Form 990-PF, Part X, line 5. For more information, see “Net Investment Assets” in the Explanation of Selected Terms section. [9] See “Operating Foundations (and Charitable Trusts)” in the Explanation of Selected Terms section for a further explanation of exempt operating foundations. [10] A foundation or charitable trust is considered domestic if it is organized in the United States. However, this does not necessarily imply that all of its assets, activities, or grant recipients are domestic. [11] See “Distributable (Payout) Amount” in the Explanation of Selected Terms for further information. purpose, such as interest, dividends, and net income from realized capital gains. The net investment income amount used in calculating the NII yield was obtained from column (b) of the income statement, found in Part I of Form 990-PF. [16] The rate-of-total-return formula used here is the same as that developed and used by Salamon and Voytek in their studies on foundation assets. See Salamon, Lester M. and Voytek, Kenneth P., Managing Foundation Assets: An Analysis of Foundation Investment and Payout Procedures and Performance, Washington, DC: The Council on Foundations, 1989, p.32. The formula for this calculation is presented in the Explanation of Selected Terms section of this article. The indexed beginning-of-year fair market value of assets amount is adjusted, based on the 1996 chain-type price index for Gross Domestic Product as reported by the U.S. Department of Commerce, Bureau of Economic Analysis. [12] Seven of the ten largest foundations had calendar year accounting periods, meaning that all of their activity occurred during the calendar year period. However, three of the ten had other fiscal year accounting periods. For the 1999 Reporting Year, the Ford Foundation had an accounting period ending in September 2000, the J. Paul Getty Trust in June 2000, and the W.K. Kellogg Foundation and the W.K. Kellogg Foundation Trust in August; therefore, much of their activity for Reporting Year 1999 occurred in Calendar Year 2000. See the Data Sources and Limitations section. [17] See Distributable (Payout) Amount, Minimum Investment Return, Net Adjustments to Distributable Amount, and Net Investment Assets in the Explanation of Selected Terms section. [13] For more information on the unrelated business income of exempt organizations, see Riley, Margaret, “Unrelated Business Income of Nonprofit Organizations: 1998,” Statistics of Income Bulletin, Spring 2002, Volume 21, Number 4. – Recoveries of Amounts Treated as Distributions and Distributions from Split-Interest Trusts (Part XI, Line 4c) [14] The J. Paul Getty Trust, the largest operating foundation, is exempt from the excise tax on net investment income. + Excess Distributions Applied to 1999 (Part XIII, Col. A, Line 5) [15] Net investment income is comprised of income that is not related to a foundation’s charitable Net Value of Noncharitable-Use Assets (Part X, Line 5) [18] The payout rate was calculated by dividing the amount of (adjusted) qualifying distributions by the amount of the monthly average of net investment (or noncharitable-use) assets. This payout formula is as follows: Qualifying Distributions (Part XII, line 4) + Taxes (Part XI, line 2c) + Deduction from Distributable Amount (Part XI, Line 6) DIVIDED BY 157 Domestic Private Foundations and Charitable Trusts, 1999 [19] The excise tax on undistributed income is a “two-tier” tax, which consists of an initial and additional tax. If a private foundation has undistributed income for a tax year that is still not distributed by the end of the following tax year, the initial tax of 15 percent is imposed. Any organization that stills fails to distribute the required amount may be subject to the additional tax, which equals 100 percent of the amount of undistributed income. [20] For further information on split-interest trusts, see Belvedere, Melissa, “Charitable Remainder Trusts, 1999,” Statistics of Income Bulletin, Summer 2002, Volume 22, Number 1. SOURCE: IRS, Statistics of Income Bulletin, Fall 2002, Publication 1136. (Rev. 12-2002) 158 158 Domestic Private Foundations and Charitable Trusts, 1999 Table 1.--Domestic Private Foundations: Number and Selected Financial Data, by Type of Foundation and Size of Fair Market Value of Total Assets [All figures are estimates based on a sample--money amounts are in thousands of dollars] Selected sources of revenue Type of foundation, Number asset size of returns Total revenue Number Amount of returns (1) (2) Contributions, gifts, Dividends and interest Net gain (less loss) and grants received from securities from sales of assets Number Amount of returns Number Amount of returns Number Amount of returns (3) (4) (5) (6) (7) (8) (9) All foundations Total............................................................................ 62,694 62,003 Zero or unreported................................................... *602 *602 $1 under $100,000................................................... 15,960 15,358 $100,000 under $1,000,000................................................... 24,623 24,571 $1,000,000 under $10,000,000................................................... 16,941 16,907 $10,000,000 under $25,000,000................................................... 2,524 2,522 $25,000,000 under $50,000,000................................................... 970 968 $50,000,000 under $100,000,000................................................... 507 507 $100,000,000 or more................................................... 567 567 83,286,037 *64,425 304,931 3,608,047 11,803,800 6,901,270 5,511,866 5,826,852 49,264,847 31,688 *602 9,337 12,368 7,339 1,155 419 219 249 38,207,793 *64,960 278,527 2,578,533 6,460,063 3,086,141 2,196,031 2,206,466 21,337,072 46,998 -7,225 19,958 15,453 2,398 921 487 556 9,334,729 -9,104 250,598 1,234,788 881,492 745,855 769,569 5,443,324 35,650 -3,312 14,772 13,427 2,246 886 467 541 30,808,192 -14,598 407,309 3,124,946 2,453,348 2,166,669 2,459,072 20,182,249 Nonoperating foundations Total............................................................................ 58,840 58,150 Zero or unreported................................................... *602 *602 $1 under $100,000................................................... 15,057 14,455 $100,000 under $1,000,000................................................... 23,202 23,150 $1,000,000 under $10,000,000................................................... 15,762 15,728 $10,000,000 under $25,000,000................................................... 2,323 2,322 $25,000,000 under $50,000,000................................................... 904 902 $50,000,000 under $100,000,000................................................... 469 469 $100,000,000 or more................................................... 521 521 74,327,308 *64,425 298,712 3,130,166 10,826,243 6,318,115 5,116,859 5,349,589 43,223,199 28,565 *602 8,434 11,325 6,443 997 366 189 209 33,484,648 *64,960 272,309 2,345,964 5,844,546 2,838,691 2,059,426 2,030,410 18,028,342 45,119 -7,225 19,137 14,693 2,231 867 454 512 8,632,626 -9,104 243,033 1,180,397 832,262 711,641 722,660 4,933,528 33,945 -3,312 14,105 12,671 2,096 834 431 497 28,270,250 -14,598 402,627 2,965,824 2,340,455 2,104,003 2,303,156 18,139,589 Operating foundations Total............................................................................ 3,854 3,853 Zero or unreported................................................... --$1 under $100,000................................................... *903 *903 $100,000 under $1,000,000................................................... 1,421 1,421 $1,000,000 under $10,000,000................................................... 1,179 1,179 $10,000,000 under $25,000,000................................................... 201 200 $25,000,000 under $50,000,000................................................... 66 66 $50,000,000 under $100,000,000................................................... 38 38 $100,000,000 or more................................................... 46 46 8,958,730 -*6,218 477,881 977,557 583,155 395,007 477,263 6,041,648 3,123 -*903 1,044 895 158 53 30 40 4,723,145 -*6,218 232,569 615,517 247,450 136,605 176,056 3,308,730 1,879 --821 760 167 54 33 44 702,103 --7,564 54,391 49,230 34,214 46,909 509,796 1,705 --*667 756 150 52 36 44 2,537,941 --*4,682 159,123 112,893 62,666 155,916 2,042,661 Grantmaking foundations Total............................................................................ 52,011 51,960 Zero or unreported................................................... *602 *602 $1 under $100,000................................................... 10,537 10,537 $100,000 under $1,000,000................................................... 20,984 20,932 $1,000,000 under $10,000,000................................................... 15,613 15,613 $10,000,000 under $25,000,000................................................... 2,332 2,332 $25,000,000 under $50,000,000................................................... 916 916 $50,000,000 under $100,000,000................................................... 482 482 $100,000,000 or more................................................... 546 546 77,075,266 *64,425 194,881 2,268,550 9,978,649 6,051,651 4,875,223 5,458,178 48,183,709 25,056 *602 6,021 10,343 6,279 1,004 377 199 231 33,805,123 *64,960 164,460 1,520,065 5,101,947 2,506,060 1,853,341 2,048,843 20,545,447 42,935 -6,021 18,105 14,670 2,253 883 465 539 9,119,537 -7,947 238,327 1,189,012 836,873 720,911 738,131 5,388,336 33,686 -3,011 13,887 12,841 2,126 852 444 526 30,253,328 -14,594 395,286 3,064,357 2,368,209 2,048,706 2,357,145 20,005,030 Grantmaking-nonoperating foundations Total............................................................................ 49,924 49,873 Zero or unreported................................................... *602 *602 $1 under $100,000................................................... 10,236 *10,236 $100,000 under $1,000,000................................................... 19,992 *19,940 $1,000,000 under $10,000,000................................................... 14,972 *14,972 $10,000,000 under $25,000,000................................................... 2,265 *2,265 $25,000,000 under $50,000,000................................................... 881 *881 $50,000,000 under $100,000,000................................................... 463 *463 $100,000,000 or more................................................... 514 *514 70,295,831 *64,425 *194,658 *2,170,132 *9,418,856 *5,856,306 *4,727,898 *5,189,969 *42,673,587 23,481 *602 5,720 9,625 5,845 953 350 184 202 30,025,417 *64,960 164,237 1,443,093 4,741,093 2,424,072 1,784,870 1,893,122 17,509,971 41,565 -6,021 17,335 14,207 2,192 852 450 508 8,558,877 -7,947 231,506 1,155,152 820,805 700,705 719,843 4,922,920 32,469 -3,011 13,272 12,373 2,069 822 427 495 28,117,092 -14,594 391,075 2,960,564 2,322,356 2,017,525 2,289,012 18,121,966 Grantmaking-operating foundations Total............................................................................ 2,087 2,087 Zero or unreported................................................... --$1 under $100,000................................................... *301 *301 $100,000 under $1,000,000................................................... 992 992 $1,000,000 under $10,000,000................................................... 641 641 $10,000,000 under $25,000,000................................................... 67 67 $25,000,000 under $50,000,000................................................... 35 35 $50,000,000 under $100,000,000................................................... 19 19 $100,000,000 or more................................................... 32 32 6,779,434 -*223 98,418 559,793 195,345 147,325 268,209 5,510,122 1,575 -*301 718 434 51 27 15 29 3,779,706 -*223 76,973 360,854 81,988 68,471 155,721 3,035,477 1,370 --770 462 61 31 15 31 560,660 --6,822 33,861 16,068 20,205 18,288 465,417 1,217 --*615 467 57 30 17 31 2,136,236 --*4,212 103,792 45,853 31,181 68,133 1,883,065 Footnotes at end of table. 159 Domestic Private Foundations and Charitable Trusts, 1999 Table 1.--Domestic Private Foundations: Number and Selected Financial Data, by Type of Foundation and Size of Fair Market Value of Total Assets--Continued [All figures are estimates based on a sample--money amounts are in thousands of dollars] Excess of revenue Type of foundation, Total expenses asset size Number Amount of returns (10) 160 Number Amount of returns (11) (12) Disbursements Net investment income purposes Number Amount of returns (13) for exempt (14) Number Amount of returns (15) (16) (17) All foundations Total............................................................................ 61,209 33,876,299 Zero or unreported...................................................*602 *81,532 $1 under $100,000................................................... 15,358 256,606 $100,000 under $1,000,000................................................... 23,913 2,035,408 $1,000,000 under $10,000,000................................................... 16,787 5,216,511 $10,000,000 under $25,000,000................................................... 2,511 3,226,287 $25,000,000 under $50,000,000................................................... 965 2,427,945 $50,000,000 under $100,000,000................................................... 507 2,423,627 $100,000,000 or more................................................... 566 18,208,383 61,931 *602 15,358 24,504 16,903 2,523 967 507 567 49,409,738 *-17,107 48,325 1,572,640 6,587,289 3,674,983 3,083,921 3,403,225 31,056,464 51,817 *301 8,429 22,219 16,367 2,480 956 501 564 57,142,092 *17 33,058 1,001,190 5,666,914 3,975,148 3,332,689 3,751,900 39,381,177 56,928 *602 12,644 22,723 16,449 2,488 954 507 561 26,402,195 *70,759 199,547 1,684,410 4,456,631 2,769,302 2,146,469 2,091,735 12,983,341 Nonoperating foundations Total............................................................................ 57,405 31,028,543 Zero or unreported...................................................*602 *81,532 $1 under $100,000................................................... 14,455 251,678 $100,000 under $1,000,000................................................... 22,492 1,642,745 $1,000,000 under $10,000,000................................................... 15,656 4,675,779 $10,000,000 under $25,000,000................................................... 2,312 2,914,462 $25,000,000 under $50,000,000................................................... 899 2,206,281 $50,000,000 under $100,000,000................................................... 469 2,203,745 $100,000,000 or more................................................... 520 17,052,321 58,383 *602 14,756 23,083 15,728 2,323 901 469 521 43,298,765 *-17,107 47,035 1,487,421 6,150,464 3,403,653 2,910,578 3,145,843 26,170,878 49,057 *301 8,429 20,798 15,362 2,290 894 465 518 52,367,146 *17 33,058 983,389 5,408,688 3,745,046 3,198,933 3,458,576 35,539,439 53,524 *602 12,042 21,354 15,353 2,298 891 469 515 24,367,480 *70,759 199,068 1,500,674 4,032,328 2,595,179 1,975,804 1,917,093 12,076,576 Operating foundations Total............................................................................ 3,803 2,847,756 Zero or unreported................................................... --$1 under $100,000...................................................*903 *4,928 $100,000 under $1,000,000................................................... 1,421 392,663 $1,000,000 under $10,000,000................................................... 1,131 540,732 $10,000,000 under $25,000,000................................................... 199 311,825 $25,000,000 under $50,000,000................................................... 66 221,665 $50,000,000 under $100,000,000................................................... 38 219,882 $100,000,000 or more................................................... 46 1,156,062 3,547 -*602 1,421 1,174 200 66 38 46 6,110,974 -*1,290 85,219 436,825 271,330 173,342 257,381 4,885,586 2,760 --1,421 1,005 190 62 36 46 4,774,946 --17,801 258,226 230,101 133,756 293,324 3,841,738 3,405 -602 1,369 1,097 190 63 38 46 2,034,714 -479 183,736 424,303 174,124 170,665 174,643 906,765 Grantmaking foundations Total............................................................................ 52,011 32,040,101 Zero or unreported...................................................*602 *81,532 $1 under $100,000................................................... 10,537 188,357 $100,000 under $1,000,000................................................... 20,984 1,513,006 $1,000,000 under $10,000,000................................................... 15,613 4,669,120 $10,000,000 under $25,000,000................................................... 2,332 2,992,413 $25,000,000 under $50,000,000................................................... 916 2,262,028 $50,000,000 under $100,000,000................................................... 482 2,283,352 $100,000,000 or more................................................... 546 18,050,292 52,007 *602 10,537 20,984 15,608 2,332 916 482 546 45,035,164 *-17,107 6,524 755,544 5,309,528 3,059,237 2,613,195 3,174,826 30,133,417 46,510 *301 6,924 19,715 15,328 2,308 910 478 546 55,752,043 *17 31,146 931,535 5,297,425 3,815,877 3,151,812 3,533,044 38,991,187 52,011 *602 10,537 20,984 15,613 2,332 916 482 546 25,309,192 *70,759 182,839 1,402,861 4,132,548 2,637,664 2,023,347 1,979,523 12,879,650 Grantmaking-nonoperating foundations Total............................................................................ 49,924 30,348,707 Zero or unreported...................................................*602 *81,532 $1 under $100,000................................................... 10,236 188,144 $100,000 under $1,000,000................................................... 19,992 1,446,268 $1,000,000 under $10,000,000................................................... 14,972 4,341,791 $10,000,000 under $25,000,000................................................... 2,265 2,877,809 $25,000,000 under $50,000,000................................................... 881 2,185,415 $50,000,000 under $100,000,000................................................... 463 2,189,745 $100,000,000 or more................................................... 514 17,038,003 49,920 *602 10,236 19,992 14,968 2,265 881 463 514 39,947,124 *-17,107 6,514 723,864 5,077,065 2,978,497 2,542,484 3,000,224 25,635,584 44,793 *301 6,924 18,723 14,750 2,243 877 461 514 51,684,594 *17 31,146 916,713 5,137,297 3,702,755 3,072,185 3,433,285 35,391,196 49,924 *602 10,236 19,992 14,972 2,265 881 463 514 23,975,904 *70,759 182,626 1,338,093 3,870,486 2,568,840 1,961,409 1,910,964 12,072,729 Grantmaking-operating foundations Total............................................................................ 2,087 1,691,395 Zero or unreported................................................... --$1 under $100,000...................................................*301 *213 $100,000 under $1,000,000................................................... 992 66,738 $1,000,000 under $10,000,000................................................... 641 327,329 $10,000,000 under $25,000,000................................................... 67 114,605 $25,000,000 under $50,000,000................................................... 35 76,613 $50,000,000 under $100,000,000................................................... 19 93,607 $100,000,000 or more................................................... 32 1,012,289 2,087 -*301 992 641 67 35 19 32 5,088,039 -*10 31,680 232,463 80,740 70,711 174,601 4,497,833 1,717 --992 578 65 33 17 32 4,067,448 --14,822 160,127 113,122 79,627 99,759 3,599,991 2,087 -*301 992 641 67 35 19 32 1,333,288 -*213 64,768 262,063 68,825 61,939 68,560 806,921 Footnotes at end of table. 160 (less loss) over expenses Domestic Private Foundations and Charitable Trusts, 1999 Table 1.--Domestic Private Foundations: Number and Selected Financial Data, by Type of Foundation and Size of Fair Market Value of Total Assets--Continued [All figures are estimates based on a sample--money amounts are in thousands of dollars] Contributions, Excise tax gifts, and on net investment Type of foundation, asset size grants paid ¹ Number income Amount of returns (18) Total Total assets (book value) Number Amount of returns (19) Number Amount of returns investment assets (book value) Number Amount of returns (20) (21) (22) All foundations Total............................................................................ 52,011 22,762,811 Zero or unreported...................................................*602 *70,759 $1 under $100,000................................................... 10,537 175,550 $100,000 under $1,000,000................................................... 20,984 1,337,647 $1,000,000 under $10,000,000................................................... 15,613 3,747,585 $10,000,000 under $25,000,000................................................... 2,332 2,481,481 $25,000,000 under $50,000,000................................................... 916 1,864,890 $50,000,000 under $100,000,000................................................... 482 1,800,951 $100,000,000 or more................................................... 546 11,283,948 (23) (24) (25) 51,221 *301 8,429 21,982 16,132 2,418 930 484 545 729,874 -488 16,051 84,615 59,017 48,857 51,388 469,458 62,066 -15,960 24,623 16,917 2,523 970 507 566 384,564,594 -555,944 9,232,821 42,975,450 29,937,231 26,066,521 27,428,937 248,367,691 54,079 -9,939 22,992 16,599 2,512 966 506 566 364,021,971 -427,073 8,231,448 39,641,889 27,917,119 24,370,044 25,613,333 237,821,066 Nonoperating foundations Total............................................................................ 49,924 22,334,540 Zero or unreported...................................................*602 *70,759 $1 under $100,000................................................... 10,236 175,535 $100,000 under $1,000,000................................................... 19,992 1,287,969 $1,000,000 under $10,000,000................................................... 14,972 3,673,984 $10,000,000 under $25,000,000................................................... 2,265 2,445,683 $25,000,000 under $50,000,000................................................... 881 1,853,150 $50,000,000 under $100,000,000................................................... 463 1,792,842 $100,000,000 or more................................................... 514 11,034,618 48,811 *301 8,429 20,613 15,314 2,281 892 465 516 686,490 -488 15,806 81,201 55,759 47,347 48,642 437,246 58,212 -15,057 23,202 15,738 2,322 904 469 520 349,131,030 -532,667 8,606,027 39,620,496 27,266,119 24,014,115 25,027,070 224,064,536 51,421 -9,939 21,690 15,584 2,316 903 469 520 336,395,985 -427,073 7,774,058 37,346,673 26,031,585 23,103,633 23,803,346 217,909,617 Operating foundations Total............................................................................2,087 428,271 Zero or unreported................................................... --$1 under $100,000...................................................*301 *15 $100,000 under $1,000,000................................................... 992 49,678 $1,000,000 under $10,000,000................................................... 641 73,601 $10,000,000 under $25,000,000................................................... 67 35,798 $25,000,000 under $50,000,000................................................... 35 11,740 $50,000,000 under $100,000,000................................................... 19 8,109 $100,000,000 or more................................................... 32 249,329 2,410 --1,369 818 137 38 19 29 43,384 --245 3,414 3,257 1,510 2,746 32,212 3,854 -903 1,421 1,179 201 66 38 46 35,433,564 -23,277 626,793 3,354,954 2,671,112 2,052,406 2,401,867 24,303,155 2,659 --1,302 1,015 196 63 37 46 27,625,986 --457,389 2,295,215 1,885,534 1,266,411 1,809,987 19,911,450 Grantmaking foundations Total............................................................................ 52,011 22,762,811 Zero or unreported...................................................*602 *70,759 $1 under $100,000................................................... 10,537 175,550 $100,000 under $1,000,000................................................... 20,984 1,337,647 $1,000,000 under $10,000,000................................................... 15,613 3,747,585 $10,000,000 under $25,000,000................................................... 2,332 2,481,481 $25,000,000 under $50,000,000................................................... 916 1,864,890 $50,000,000 under $100,000,000................................................... 482 1,800,951 $100,000,000 or more................................................... 546 11,283,948 46,282 *301 6,924 19,649 15,213 2,289 899 472 536 710,920 -463 14,778 78,228 56,878 45,934 49,455 465,184 51,408 -10,537 20,984 15,613 2,331 916 482 546 369,965,518 -426,577 7,622,344 39,277,295 27,386,240 24,404,234 25,834,491 245,014,338 48,228 -8,429 20,036 15,497 2,325 913 481 546 352,956,872 -371,693 6,973,812 37,151,408 26,081,606 23,192,523 24,298,614 234,887,217 Grantmaking-nonoperating foundations Total............................................................................ 49,924 22,334,540 Zero or unreported...................................................*602 *70,759 $1 under $100,000................................................... 10,236 175,535 $100,000 under $1,000,000................................................... 19,992 1,287,969 $1,000,000 under $10,000,000................................................... 14,972 3,673,984 $10,000,000 under $25,000,000................................................... 2,265 2,445,683 $25,000,000 under $50,000,000................................................... 881 1,853,150 $50,000,000 under $100,000,000................................................... 463 1,792,842 $100,000,000 or more................................................... 514 11,034,618 44,732 *301 6,924 18,708 14,712 2,236 877 461 513 673,557 -463 14,566 75,937 55,020 44,854 48,136 434,580 49,321 -10,236 19,992 14,972 2,264 881 463 514 342,996,817 -404,746 7,232,044 37,540,275 26,520,567 23,338,108 24,663,656 223,297,420 46,603 -8,429 19,163 14,895 2,259 880 463 514 331,559,718 -371,693 6,699,591 35,759,020 25,439,361 22,490,029 23,500,201 217,299,822 Grantmaking-operating foundations Total............................................................................2,087 428,271 Zero or unreported................................................... --$1 under $100,000...................................................*301 *15 $100,000 under $1,000,000................................................... 992 49,678 $1,000,000 under $10,000,000................................................... 641 73,601 $10,000,000 under $25,000,000................................................... 67 35,798 $25,000,000 under $50,000,000................................................... 35 11,740 $50,000,000 under $100,000,000................................................... 19 8,109 $100,000,000 or more................................................... 32 249,329 1,550 --940 501 53 22 11 23 37,363 --213 2,291 1,858 1,079 1,318 30,604 2,087 -*301 992 641 67 35 19 32 26,968,701 -*21,831 390,299 1,737,020 865,673 1,066,126 1,170,835 21,716,918 1,624 --873 602 66 33 18 32 21,397,154 --274,220 1,392,388 642,244 702,494 798,413 17,587,394 Footnotes at end of table. 161 Domestic Private Foundations and Charitable Trusts, 1999 Table 1.--Domestic Private Foundations: Number and Selected Financial Data, by Type of Foundation and Size of Fair Market Value of Total Assets--Continued [All figures are estimates based on a sample--money amounts are in thousands of dollars] Investments in securities (book value) Type of foundation, Total asset size Number Amount of returns (26) 162 Corporate obligations stock Number Amount of returns (27) (28) Number Corporate bonds Amount of returns (29) (30) Number Amount of returns (31) (32) (33) All foundations Total............................................................................ 44,201 291,467,705 Zero or unreported................................................... --$1 under $100,000................................................... 5,424 212,367 $100,000 under $1,000,000................................................... 19,171 5,745,574 $1,000,000 under $10,000,000................................................... 15,277 29,599,625 $10,000,000 under $25,000,000................................................... 2,361 21,822,967 $25,000,000 under $50,000,000................................................... 928 19,006,071 $50,000,000 under $100,000,000................................................... 485 20,398,033 $100,000,000 or more................................................... 555 194,683,069 15,752 -*1,505 4,555 6,981 1,412 582 325 392 42,823,301 -*35,122 645,771 5,040,612 3,776,868 3,176,257 3,398,279 26,750,392 39,529 -3,617 17,448 14,256 2,281 904 475 549 210,906,683 -105,113 4,253,131 19,747,723 14,423,473 12,902,005 13,914,052 145,561,185 18,512 -*2,709 5,488 7,539 1,418 605 331 422 37,737,721 -*72,132 846,672 4,811,289 3,622,626 2,927,809 3,085,702 22,371,491 Nonoperating foundations Total............................................................................ 42,471 270,653,048 Zero or unreported................................................... --$1 under $100,000................................................... 5,424 212,367 $100,000 under $1,000,000................................................... 18,521 5,604,833 $1,000,000 under $10,000,000................................................... 14,488 28,216,609 $10,000,000 under $25,000,000................................................... 2,206 20,564,946 $25,000,000 under $50,000,000................................................... 872 18,093,504 $50,000,000 under $100,000,000................................................... 451 19,121,994 $100,000,000 or more................................................... 510 178,838,795 14,965 -*1,505 4,348 6,582 1,315 545 305 364 39,207,373 -*35,122 613,855 4,745,301 3,558,263 2,977,151 3,116,012 24,161,668 38,082 -3,617 17,003 13,529 2,134 851 443 505 196,089,393 -105,113 4,161,853 18,810,364 13,591,820 12,333,458 13,105,202 133,981,584 17,864 -*2,709 5,384 7,178 1,325 569 306 392 35,356,282 -*72,132 829,125 4,660,944 3,414,864 2,782,895 2,900,780 20,695,543 Operating foundations Total............................................................................1,730 20,814,658 Zero or unreported................................................... --$1 under $100,000................................................... --$100,000 under $1,000,000................................................... 651 140,741 $1,000,000 under $10,000,000................................................... 789 1,383,016 $10,000,000 under $25,000,000................................................... 155 1,258,021 $25,000,000 under $50,000,000................................................... 56 912,567 $50,000,000 under $100,000,000................................................... 34 1,276,039 $100,000,000 or more............. [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A853188cc75709993. Public record. Not legal advice.