The first step in setting up a private foundation is to establish an entity distinct from the grantor/donor with a distinct tax ID number.
The donor has two choices in this regard:
Corporation: In the state of Ohio, a non-profit corporation may be formed by one incorporator who must appoint at least one trustee who is often himself. Action can be taken by unanimous consent rather than a formal board meeting. A statement of continued existence must be filed with the Secretary of State every five years. The main advantage of forming a non-profit corporation is flexibility. As situations and tax laws change over the years, the corporate trustee has broad authority to repeal or adopt new strategies as he sees fit. A filing with the Secretary of State is all that is required to be tax exempt for state law purposes. Getting recognized as a tax exempt charity for federal purposes is far more complicated and is discussed later in this book.
Trust: A grantor/donor can also create a separate entity by executing an irrevocable trust. Only one grantor/donor and one trustee are required with the same person often serving in both capacities. The trustee may be required to file reports with the Secretary of State's office. The main advantage of executing a trust is simplicity - fewer required filings. A irrevocable trust, by its nature, is inflexible. The trust document becomes, in effect, the one and only board meeting where the grantor/donor attempts to provide for all future eventualities. Amending an irrevocable trust is difficult.