Why can't private foundations fundraise like public charities?

Private foundations are distinct entities from public charities, particularly in their funding mechanisms and regulatory frameworks. The primary reason private foundations cannot fundraise like public charities lies in the nature of their funding sources.

Unlike public charities, which can actively seek donations from the general public and often rely on a larger donor base to sustain their operations, private foundations typically operate with funds established by a single benefactor, family, or certain limited sources. The foundation's assets are endowed at its inception, and while they may have some avenues for generating additional funds, they are fundamentally structured around a pool of resources that does not require continuous external fundraising activities.

This difference in funding model is emphasized by the obligations placed on private foundations, which are limited by regulations that often discourage them from seeking new donations from the general public. This regulatory framework contributes to their inability to engage in the same aggressive fundraising campaigns that public charities can pursue, which is essential for their operational model.

In comparison, public charities are designed to engage with and receive financial support from the community at large, whereas private foundations are mandated to focus on their endowments to fulfill their philanthropic missions, often providing grants rather than fundraising from the public. Thus, the prohibition on actively seeking new donations restricts their fundraising capabilities