Private foundations created to address the public good began to appear in America “almost as soon as the U.S. Constitution was adopted.”*
Large private foundations in trust or corporate form became a favorite method of charitable giving among the wealthiest American individuals and families early in the 20th century. Examples include the Carnegie (1905), Rockefeller (1913), and Ford (1936) foundations. Today there are roughly 84,000 foundations filing with the IRS, with about $1 trillion in assets. In 2006, investor Warren Buffett pledged $31 billion to the Bill and Melinda Gates Foundation Trust, a harbinger of mega-gifts and bequests to come via the Giving Pledge. Even after giving away more than $45 billion since its founding in 2000, the Gates Foundation reported assets of more than $50 billion in 2017.

Carnegie’s Gospel of Wealth (1889) asserted that the richest people
have a responsibility to use their private wealth for the public good
A new tool for charitable gift planning was introduced in 1914 with the founding of America’s first community foundation in Cleveland, Ohio by attorney Frederick Harris Goff and the Cleveland Trust Company. The Cleveland Foundation and many subsequent community foundations were organized as trusts; others are in the form of charitable corporations.
By using a variance power (cy pres), public charitable foundations give donors the security of knowing that endowed gifts and bequests whose original purposes become outdated will remain useful to meet the needs of people in a particular geographic area. There are now more than 400 community foundations in the U.S.
There was a movement to find alternatives to community-based funds in the 1920s. Local community foundations often had geographic and secular restrictions on the use of endowed gifts under their management. New York attorney Daniel Remsen created and promoted a Uniform Trust for Public Uses through which he intended to broaden the opportunities for donors to support national and international charities as well as religious nonprofits such as the American Bible Society and other Protestant, Catholic, and Jewish organizations. Remsen’s Uniform Trust template enabled donors to arrange charitable trusts to benefit virtually any qualified charitable organizations. He included a provision for trusts to pay income to non-charitable beneficiaries for life or a term of years.
Community foundations and Jewish Federations popularized field-of-interest funds and supporting organizations, and were among the first nonprofits to offer donor-advised funds (DAFs) in the 1930s. According to the National Philanthropic Trust, in 2017 there were more than 463,000 individual donor-advised funds in the U.S., with assets totaling $110 billion. Grants from DAFs to qualified charities provided $19 billion in 2017. Fidelity Charitable alone received about $7.8 billion in gifts in 2018, and granted more than $5.2 billion to charities.
Donor-advised funds are not subject to the payout, transparency, and investment restrictions regulating private foundations. The TCJA has made DAFs even more popular, since they can be funded when the donor can use a charitable deduction, and the DAF can make grants at a later time.
* The history of foundations is told expertly by David C. Hammack and Helmut K. Anheier in A Versatile American Institution: The Changing Ideals and Realities of Philanthropic Foundations (Washington, DC: Brookings Institution Press, 2013).