Philanthropic foundation/Definition

A tax-exempt corporation and certain trusts created for charitable purposes, according the the U.S. Internal Revenue Service. Foundations are generally prohibited from self-dealing with their donors and certain others, required to make annual distributions for charitable purposes, permitted to have only restricted holdings in private businesses, expected to be prudent in making investments that do not threaten their charitable purposes, and to assure that their expenditures are only for charitable purposes. Also known as private foundations.