To establish a Private Foundation as a Trust, the founder must sign a written document making a gift, in trust to one or more trustees. Within limits, the terms of the trust can be broad or narrow.
The founder himself can be a trustee. The Trust is generally located in the founder’s home state.
There are drawbacks to creating a Private Foundation as a Trust.
Perhaps, the most significant drawback is that the trustees of a Trust have a fiduciary duty to the beneficiaries. This is a higher standard than the Business Judgment Rule that applies to corporate directors.
Therefore, it can be more difficult to attract outsiders who are willing to serve as trustees.
In addition, the beneficiaries of a Trust may have standing to sue that they would not have if the Private Foundation were a corporation and not a Trust.