Private foundations are believed to be durable entities.  Perpetuity is often assumed at the planning stage.  Canada Revenue Agency (CRA) data shows, however, that 3,073 private foundations closed during the period 2000 to 2025.

Growth in Private Foundations

Private foundations have seen significant growth in Canada, with an increase in assets of over 300% in the last 20 years to over $100 billion in total value.  There are currently 7072 private foundations registered in Canada in August 2025.  The private foundation is the fastest growing category of registered charities.

To provide perspective, from 2013 to 2025 there was a net increase in private foundations of 33.7% from a baseline of 5,290. During the same period 1,682 private foundations were revoked, aka closed. Private foundations are being created at an unparalleled rate, but the operating challenges are frequently underestimated.

Revocations by Category

It’s enlightening to review the revocations by category.  Since 2000, 55 private foundations were revoked after an audit by CRA (that is, for cause). The pace of revocations has increased in the last four years, up from 35 during the period 2000 to 2021. Although the CRA database is vague about the actual reasons, they include participation in tax shelters, lapsed incorporation that invalidated the registration as a charity, receipting infractions, and private benefit.  The most common reason is inadequate books and records, which is CRA’s “gotcha” rationale masking another cause.

Since 2000, 1090 private foundations were revoked for failure to file the annual charity return (the T3010).  A failure to file may be a) deliberate, which indicates an organizational death wish; or b) inadvertent, which suggests a charitable mission that has faded or become too burdensome to pursue. These foundations may reapply, but most are simply exhausted.

The largest cohort is the 1917 private foundations that filed for voluntary revocation since 2000. Again,  CRA does not provide details, but in my experience this group has one or more of the following characteristics:

• directors/trustees fatigue;

• lack of succession plan and leadership;

• short-term mission;

• spenddown mandate;

• insufficient financial resources.

The high hopes of founders may prove burdensome to future generations of directors/trustees to implement.  The monetary value of the foundation may be inadequate for the purpose, or, simply, there is no administrative support for volunteer directors and trustees, who are often volunteer family members.

Operational Hurdles and Planning Assumptions

There is no shame in a private foundation running its course – all human institutions do.  The responsible action is to dissolve a foundation and redirect funds to other charities.

The planning community does, however, bear some shame.  Historically, advisors have been insufficiently frank with their clients about the operational responsibilities and burdens of private foundations.  One of the great clichés of charitable planning is comparing private foundations and donor advised funds.  Private foundations sound more sophisticated, but donor advised funds are generally more durable and easier to operate.

The bones of the 3,073 dead foundations suggest there are considerable hurdles to operating a private foundation.  They are simply far more difficult to run well than is typically understood.  Estate plans that include private foundations need to consider both charitable commitment and operational support.  Mission engagement, governance, succession planning, and management are all essential for private foundation success.