Public Charity vs. Private Foundation: What’s the Right Path for Your Legacy?

When you’ve built significant wealth, there comes a point where the conversation shifts from how much to what for. From accumulation to allocation. From returns to meaning.

For one of my prospective clients, a highly successful entrepreneur in his early 60s with over $60 million in net worth and no direct heirs, this shift became personal. He had $40 million in low-basis stock and another $5 million in retirement assets. The question he posed was simple but profound:

“What do I want this wealth to represent when I’m gone?”

We considered the usual suspects: Donor-advised funds, charitable trusts, one-time gifts. But the real discussion came down to two options:

Public charity vs. private foundation.

Here’s what we discovered, and what you should know if you’re facing a similar decision.

When a Private Foundation Makes Sense

In our case study, the client wasn’t just looking to write checks. He wanted to design a platform that could:

• Reflect his values

• Directly engage with causes he cared about (education, climate, human rights)

• Offer structure for a legacy that would live beyond him, even without heirs

The solution? A private foundation.

By contributing appreciated securities:

• He eliminated capital gains tax

• Offset a multi-year Roth conversion strategy, reducing future RMD exposure

• Created a dedicated giving vehicle that he could shape and control during his lifetime

More importantly, the foundation allowed him to answer the bigger question: What kind of impact do I want to have, intentionally, thoughtfully, and permanently?

What About Starting a Public Charity?

For donors with:

• A strong network of supporters

• A desire to fundraise publicly

• A mission that requires scale and community involvement

…a public charity can be a powerful route.

But it comes with significantly more complexity:

• You must pass the public support test, meaning funding must come from a broad base, not just one donor.

• It requires a board, audited financials, and typically a paid staff.

• You’ll need a compelling public-facing mission and a long-term plan to raise funds beyond your initial gift.

In short: If you want to run an organization and rally the public, a public charity may be ideal.

But if you want to fund causes with full control and less red tape, a private foundation may be far more effective.

Why Not a Donor-Advised Fund (DAF)?

DAFs offer convenience, higher deduction limits, and zero administrative burden. For many, it’s a perfect fit.

But for ultra-high-net-worth individuals, they often fall short:

• You can’t hire family or staff

• No direct charitable programs

• Limited flexibility for international giving or PRIs

My client wanted a legacy, not just a fund. A voice, not just a checkbook. That’s why the private foundation was a better choice.

Final Thought: Legacy Is Not a One-Size-Fits-All Strategy

If you’re exploring how to turn your wealth into something meaningful, and especially if you don’t have heirs, this decision matters.

Ask yourself:

• Do I want control or convenience?

• Am I looking to fund causes or build something enduring?

• Is my giving meant to solve a problem now, or shape a future beyond me

The right structure depends on your goals, values, and the role you want to play.

Wealth is what you accumulate.

Legacy is what you leave behind, intentionally.

If you’d like to explore which structure best aligns with your vision, I’m always happy to talk through scenarios and help you build a plan that reflects not just your assets, but your aspirations.

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