Private Foundation Payout Gap Calculator

Confirm whether your private foundation’s qualifying distributions meet the annual 5% payout requirement once prior-year excess credits are applied. Provide the average noncharitable-use asset base, this year’s qualifying distributions, and any carryforward to reveal the remaining gap or surplus you can bank for future years.

Average monthly fair market value of assets subject to the 5% payout rule.
Grants, direct charitable expenses, and program-related investments counted toward payout.
Defaults to $0.00 when blank. Enter unused excess distributions still within the five-year carryforward window.

Planning reference only. Confirm payout calculations with your foundation’s CPA or tax counsel before filing Form 990-PF.

Examples

  • Example 1 — $12,500,000.00 asset base, $520,000.00 distributions, $75,000.00 carryforward ⇒ Required payout (5%): $625,000.00 | Qualifying distributions counted: $520,000.00 | Carryforward applied: $75,000.00 | Remaining gap: $30,000.00 | Surplus eligible for future years: $0.00 | Coverage ratio: 95.20%
  • Example 2 — $8,000,000.00 asset base, $450,000.00 distributions, $50,000.00 carryforward ⇒ Required payout (5%): $400,000.00 | Qualifying distributions counted: $450,000.00 | Carryforward applied: $0.00 | Remaining gap: $0.00 | Surplus eligible for future years: $100,000.00 | Coverage ratio: 112.50%

FAQ

How should I calculate the average asset base?

Sum monthly fair market values of assets not used directly for charitable purposes, divide by 12, and subtract acquisition debt as IRS rules require.

What counts as a qualifying distribution?

Cash grants, approved program-related investments, and direct charitable expenses qualify. Investment management fees and taxes generally do not.

Can I model a partial year?

Yes. Use the prorated average asset base for the months the foundation was active; the calculator will size the required payout accordingly.

How does the calculator treat carryforwards?

It automatically applies the minimum amount needed to close the gap and leaves any unused excess available for later years within the five-year window.

Additional Information

  • The IRS requires private foundations to distribute 5% of the average fair market value of noncharitable-use assets each year.
  • Carryforwards from excess distributions expire after five years; the calculator assumes any entry is still eligible.
  • Qualifying distributions include grants paid, reasonable administrative expenses tied to charitable work, and certain program-related investments.
  • Coverage ratio compares counted payout to the required minimum so boards can document compliance.
  • Surplus output helps plan set-asides for large future grants or manage investment draw schedules.

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