Calculating the Minimum Distribution Requirement

A Guide for Private Foundation Distribution Rules

An important distinction between a private foundation and a public charity is that a private foundation is required to spend money.

Private foundations are required to distribute annually – through grants and grant-related expenses – at least 5% of the total fair market value of their noncharitable-use assets from the preceding year.

Calculating this minimum distribution is complex and involves many components of the foundation’s operations, such as grants, cash reserves, tax liability, and certain administrative expenses, to name a few. This resource helps you navigate this requirement.

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