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Nonprofit Law/Foundation vs. Non-profit


QUESTION: Greetings Mr. Mechanic,

I came across your response to an inquiry of the difference between an non-profit and foundation as I was researching the same topic.

I have established a non-profit in my state and I am no seeking to file for my federal non-profit status, but I was wondering if I should change my status to a public foundation because I hope to provide funding to other organizations in the form of grants.

Could you please further explain the difference or point me to the appropriate resource to further my research.

ANSWER: It appears that you have established nonprofit Georgia corporation.

There is no tax significance to the word "foundation", although there is for "private foundation". Also the term "public foundation" is not used, although the term "public charity" is used.  So it appears you are asking about the differences between a public charity and a private foundation.

A quick summary of the differences between public charities and
private foundations can be found at:

If I misunderstood your question, clarify your question. After you give me that information I will reply further.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    

---------- FOLLOW-UP ----------

QUESTION: When establishing a non-profit corporation we are required to place "Inc." at the end of the organization name, unlike the United Way, USA Track & Field Association and others.

What would be the difference in our organization being recognized as a "public charity" vs. a "public foundation" in Georgia,what are the requirements and pros and cons of each?

The IRS does not care what the name of the nonprofit corporation is.  They also do not care if the entity is not a nonprofit corporation, as it could be a trust or an unincorporated association instead.

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Your question about Georgia is beyond the scope of this fee forum, if you are asking how the state of Georgia will be dealing with the entity.

If you want more information about the IRS treatment -- a very detailed good publication to read that explains the differences between Public Charity and  Private Foundation Status
is at "Public Charity or Private Foundation Status"
which is 236 pages of pdf information and, therefore, takes some time to download.

If you want me to analyze your proposed operation and make recommendations, I would need to spend a substantial amount of time.  If you want to hire me, send me an email directly to my email address below and I will quote you my fees.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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