Posted: March 3rd, 2022

HSO Search And Proposal Idea

113

Resource A: What Is a Foundation?

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THERE ARE ESSENTIALLY two types of foundations: private and public. As defi ned by Foundation Center (http://foundationcenter.org/getstarted /tutorials/ft_tutorial/what.html), a private foundation

• Is a nongovernmental, nonprofi t organization

• Has a principal fund or endowment

• Is managed by its own trustees and directors

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• Maintains or aids charitable, educational, religious, or other activities serving the public good

• Makes grants, primarily to other nonprofi t organizations

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• Is required to fi le a 990-PF form with the IRS annually

The three private foundation types are (1) independent or family foun- dations, (2) corporate foundations, and (3) operating foundations.

1. The term family foundation does not have any legal meaning, but the Council on Foundations defi nes a family foundation as one in which “the donor or the donor’s relatives play a signifi cant role in governing and/ or managing the foundation.” The Foundation Center refers to independent and family foundations as those receiving endowments from individuals or families (and, in the case of family foundations, they continue to show measurable donor or donor-family involvement).

2. A corporate foundation is also referred to as a company-sponsored foundation. A corporate foundation is established by a corporation but tends to operate separately from the company and to have its own dedi- cated staff. In most cases it is a separate legal entity that maintains close ties to the parent company, and the members of the foundation and company boards sometimes intentionally overlap. These foundations tend to give to a broad spectrum of organizations; however, some establish giving policies that refl ect the parent company’s interest. Others allow the employees of the

O'Neal-McElrath, Tori, and Mim Carlson. Winning Grants Step by Step : The Complete Workbook for Planning, Developing and Writing Successful Proposals, John Wiley & Sons, Incorporated, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=1469450. Created from ashford-ebooks on 2022-03-04 00:42:40.

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http://foundationcenter.org/getstarted/tutorials/ft_tutorial/what.html
http://foundationcenter.org/getstarted/tutorials/ft_tutorial/what.html
Resource A—What Is a Foundation?114

corporation to have decision-making authority over some—if not all—of the foundation’s grantmaking. Often, corporate foundations provide grant support in the areas where their corporation has a base of operation.

3. An operating foundation uses its resources to conduct research or provide a direct service. It is not uncommon for this type of foundation to engage in fundraising as a means of generating the revenue it needs to make grants.

A public foundation (also known as a public charity) as defi ned by the Foundation Center

• Is a nongovernmental, nonprofi t 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 benefi ting unrelated organizations or indi- viduals as one of its primary purposes

• Makes grants, primarily to other nonprofi t organizations

• Is required to fi le a 990 form with the IRS

Here are three examples of public foundations: Community Foundation. A community foundation is a tax-exempt, non-

profi t, autonomous, publicly supported, nonsectarian philanthropic institu- tion with a long-term goal of building permanent, named component funds, established by many separate donors, for the broad-based charitable benefi t of the residents of a defi ned geographic area, typically no larger than a state.

Donor-Advised Fund. A donor-advised fund (DAF) “is a charitable giv- ing vehicle set up under the tax umbrella of a public charity, which acts as sponsor to many funds. A donor-advised fund offers the opportunity to cre- ate a fl exible vehicle for charitable giving as an alternative to direct giving or creating a private foundation. Donors receive administrative support, a cost savings and tax advantages by conducting their grantmaking through a donor-advised fund.” Once the primary domain of community founda- tions, DAFs are now offered at major fi nancial institutions such as Fidelity Investments, which has the largest DAF program in the country. DAFs are the fastest growing charitable vehicle. Unfortunately for grantseekers, nonprofi ts typically cannot apply for these funds, as the grants are recom- mended by the advisers to the funds.

Women’s Funds. As stated in the Women’s Funding Network (www .womensfundingnetwork.org):

In the 1970s and early 1980s, following the creation of the Ms. Foundation, the idea of “women’s funds”—organizations focused on

O'Neal-McElrath, Tori, and Mim Carlson. Winning Grants Step by Step : The Complete Workbook for Planning, Developing and Writing Successful Proposals, John Wiley & Sons, Incorporated, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=1469450. Created from ashford-ebooks on 2022-03-04 00:42:40.

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2 0 1 3 . Jo

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http://www.womensfundingnetwork.org
http://www.womensfundingnetwork.org
Resource A—What Is a Foundation? 115

granting money to women and girls—gained momentum. New funds were created from regional funds like the New York Women’s Foundation to family foundations such as the Sister Fund and the Daphne Foundation. By 2000, Women’s Funding Network numbered 94 funds with $200 million in collective assets. In the past decade, women’s funds formalized their shared values, including a commitment to a democratic vision of philanthropy, and distilled a “social change” philosophy that prioritizes investments capable of making lasting and proven changes in the lives of women and girls, by fi xing systems not symptoms.

Women’s funds are located in communities nationwide, and each has its own grant guidelines.

O'Neal-McElrath, Tori, and Mim Carlson. Winning Grants Step by Step : The Complete Workbook for Planning, Developing and Writing Successful Proposals, John Wiley & Sons, Incorporated, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=1469450. Created from ashford-ebooks on 2022-03-04 00:42:40.

C o p yr

ig h t ©

2 0 1 3 . Jo

h n W

ile y

& S

o n s,

I n co

rp o ra

te d . A

ll ri g h ts

r e se

rv e d .

O'Neal-McElrath, Tori, and Mim Carlson. Winning Grants Step by Step : The Complete Workbook for Planning, Developing and Writing Successful Proposals, John Wiley & Sons, Incorporated, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=1469450. Created from ashford-ebooks on 2022-03-04 00:42:40.

C o p yr

ig h t ©

2 0 1 3 . Jo

h n W

ile y

& S

o n s,

I n co

rp o ra

te d . A

ll ri g h ts

r e se