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Foundations Today Tutorial

What is a foundation?

The philanthropic world consists of two principal types of foundations, private and public. Each of these will be discussed below.

A private foundation

  • is a nongovernmental, nonprofit organization;
  • has a principal fund or endowment;
  • is managed by its own trustees and directors;
  • maintains or aids charitable, educational, religious, or other activities serving the public good;
  • makes grants, primarily to other nonprofit organizations; and
  • is required to file a 990-PF form with the IRS annually.
There are three different types of private foundations:
  1. Independent or Family Foundations receive endowments from individuals or families (and, in the case of family foundations, they continue to show measurable donor or donor-family involvement).
  2. Company-Sponsored or Corporate Foundations receive funds from their parent companies, although they are legally separate entities.
  3. Operating Foundations run their own programs and services and typically do not provide much grant support to outside organizations.
A public foundation
(Also know as a "Grantmaking Public Charity")
  • is a nongovernmental, nonprofit organization;
  • receives funding from numerous sources and must continue to seek money from diverse sources in order to retain its public charity status;
  • is managed by its own trustees and directors;
  • operates grants programs benefiting unrelated organizations or individuals as one of its primary purposes;
  • makes grants, primarily to other nonprofit organizations; and
  • is required to file a 990 form with the IRS.
There are numerous types of public foundations:
  1. Community Foundations seek support for themselves from the public, but like private foundations provide grants. Their grants primarily support the needs of the geographic community or region in which they are located. Due to broad public support, the IRS does not consider these to be private foundations.
  2. Women's Funds—examples include the Los Angeles Women's Foundation, the Ms. Foundation for Women, the New York Women's Foundation, and the Michigan's Women's Foundation.
  3. Other Public Foundations include funds serving other population groups and field-specific funds, such as health funding foundations set up with proceeds from health care conversions—often referred to as "new health foundations."
Direct Corporate Giving
  • While corporations can and do set up private foundations, most of their giving comes directly from companies to recipient organizations. Corporations are not required to report this giving on any standard public document, and the only information the Center has on them comes from voluntary reporting and from the Center's surveys. Because it is not comprehensive, this data is not included in our analyses.
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