Corporations provide support to nonprofits through direct-giving programs, private foundations, or both. This can sometimes be a source of confusion for grantseekers. Here are some of the elements that may help to distinguish between the two types of corporate giving:
Company-Sponsored Foundations:
- are separate legal entities, they maintain close ties with the parent company, and their giving usually reflects company interests.
- generally maintain small endowments and rely on regular contributions from the parent company and/or subsidiaries to support their giving programs.
- often grow their endowments in profitable years and tap them in leaner years.
- must follow the appropriate regulations governing private foundations, including filing an annual Form 990-PF with the IRS.
Corporate Direct Giving Programs:
- are not separately incorporated and do not adhere to private foundation laws or regulations or file a Form 990-PF.
- enable the corporation to deduct up to ten percent of its pre-tax income for direct charitable contributions (this includes giving to the company's foundation.) The average percentage is closer to one percent.
- make various other kinds of donations, sometimes treated as business expenses, which are not necessarily included in giving statistics.
- are often used as a supplement by the company to support progams that do not fall under the guidelines of the company-sponsored foundation.
- do not have an endowment.
- frequently include employee matching gifts and in-kind gifts as part of their grantmaking activities.
As noted, company-sponsored foundations report to the IRS annually by means of the Form 990-PF, which the Foundation Center makes available for public use through 990 Finder, Foundation Finder and The Foundation Directory Online. On the other hand, it may be difficult to get information on the direct giving programs of corporations, since no public disclosure is required. Corporate giving programs are often managed by a company's community or public relations department. Corporate giving is usually limited to programs of benefit to employees, their families, or residents of specific locations where the company conducts business.
For a listing of resources that may be helpful in finding corporate support, see our FAQ "Where can I find information on corporate giving?"
To learn more about corporate giving, attend our Introduction to Corporate Giving, a free one-hour class.
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