0326 Publ 5505 (PDF)

Official source: IRS Forms, Instructions & Publications (https://www.irs.gov/pub/irs-pdf/p5505.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

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Private foundations that were organized for charitable purposes are exempt from income taxes. Because of their narrow bases of support and control, they are subject to stricter rules than public charities. Private foundations are required to pay an excise tax on “net investment income”—the amount of gross investment income and capital gain net income in excess of allowable deductions. Most foundations are also required to distribute annually a minimum amount for charitable purposes. These requirements, and other private foundation rules, are defined under Internal Revenue Code (IRC) Sections 4940–4945. SOI collects data from a sample of any Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, that were filed by private foundations that are tax-exempt under IRC Section 501(c)(3).

• In real terms, private foundations’ total assets and charitable disbursements increased at rates 3 and 5 times that of GDP, respectively, between Tax Years (TY) 1985 and

• The largest foundations, those with $100 million or more of total assets, represented 1.5% of all returns that were filed for TY 2022. These organizations accounted for 68.3% of total assets, 70.1% of total revenue, and 64.6% of contributions, gifts, and grants paid.

• Nonoperating foundations accounted for 91.2% of the returns that were filed and most financial activity for TY

2022. These foundations primarily support charitable activities through grants and distributions. In contrast, operating foundations spend their income or assets on direct involvement in a tax-exempt, charitable activity.

• Foundations derived the largest share of revenue (65.74%) from contributions and grants that were received and their second largest from sales of assets (19.19%).

• A private foundation’s payout rate—the ratio of qualifying distributions to noncharitable-use assets—provides insight into the degree that nonoperating foundations exceed the required 5-percent minimum distribution. For TY 2022, the median payout rate increased to 5.71%.

• Effective for TY 2020 onwards, a flat excise tax rate of 1.39% on investment income became the rule for domestic entities, replacing the previous system of either a standard 2% or 1% for those meeting certain standards.

Private Foundations: Median Payout Rates, by Size of Total Assets, Tax Year 2022

• $100M

$50M to $100M

$10M to $50M

$1M to $10M

< $1M

All

4.80 4.90 5.00 5.10 5.20 5.30 5.40 5.50 5.60 5.70 5.80 5.90 6.00 6.10

Median payout rate (percentage)

Percentage of Private Foundation Returns Filed, Total Assets, Total Revenue, and Contributions, Gifts, and Grants Paid, by Foundation Size, Tax Year 2022

Contributions, gifts,

and grants paid

Total revenue

Total assets (fair market value)

Returns filed

0% 10% 20% 30% 40% 50% 60% 70% 80%

$100 million or more $50 million under $100 million $10 million under $50 million $1 million under $10 million Less than $1 million

Organization

Tax Statistics Publication 5505 (Rev. 3–2026) Catalog Number 75555K Department of the Treasury Internal Revenue Service www.irs.gov