Foundations

What is a Foundation?

The Foundation Center has more information. Read more.

Four Types of Foundations and Their General Characteristics

Independent Foundation

Established to aid social, educational, religious, or other charitable activities.

Source of Funds Endowment generally derived from a single source such as an individual, a family, or a group of individuals. Contributions to endowment limited as to tax deductibility.
Decision-Making Activity Decisions may be made by donor or member of the donor's family; by an independent board of directors or trustees; or by a bank or trust officer acting on the donor's behalf.
Grantmaking Requirements Broad discretionary giving allowed but may have specific guidelines and give only in a few specific fields. About 88% limit their giving to local area.
Reporting Annual information returns (990-PF) filed with IRS must be made available to public. A small percentage issue separately printed annual reports.

Company-Sponsored Foundation

Legally an independent grantmaking organization with close ties to the corporation providing funds.

Source of Funds Endowment and annual contributions from a profit-making corporation. May maintain small endowment and pay out most of contributions received annually in grants, or may maintain endowment to cover contributions in years when corporate profits are down.
Decision-Making Activity Decisions made by board of directors often composed of corporate officials, but which may include individuals with no corporate affiliation. Decisions may also be made by local company officials.
Grantmaking Requirements Giving tends to be in fields related to corporate activities or in communities where corporation operates. Usually give more grants but in smaller dollar amounts than independent foundations.
Reporting Annual information returns (990-PF) filed with IRS must be made available to public. A small percentage issue separately printed annual reports.

Operating Foundation

An organization that uses its resources to conduct research or provide a direct service.

Source of Funds Endowment usually provided from a single source, but eligible for maximum deductible contributions from public.
Decision-Making Activity Decisions generally made by independent board of directors.
Grantmaking Requirements Makes few, if any grants. Grants generally related directly to the foundation's program.
Reporting Annual information returns (990-PF) filed with IRS must be made available to public. A small percentage issue separately printed annual reports.

Community Foundation

A publicly sponsored organization that makes grants for social educational, religious, or other charitable purposes in a specific community or region.

Source of Funds Contributions received from many donors. Usually eligible for maximum tax deductible contributions from public.
Decision-Making Activity Decisions made by board of directors representing the diversity of the community.
Grantmaking Requirements Grants generally limited to charitable organizations in local community.
Reporting IRS 990 return available to public. Many publish full guidelines or annual reports.

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How to Find Detailed Information on Specific Foundations

Use these resources to find in-depth information on prospective funders.

The Foundation's Web site

About 8,000 foundations have a Web site which will provide detailed information about their giving priorities and past grants awarded. To find a funder's web site use:
Foundations' IRS 990-PF Forms
These forms are information returns filed annually by U.S. private foundations. They are a valuable source of information on the many foundations that do not have a web site or do not issue annual reports. Information provided on 990-PF forms includes:
  • financial data
  • brief application guidelines
  • names of the foundation's officers and trustees
  • list of grants awarded by the foundation
Annual Reports
Valuable because they state the mission and philosophy of the foundation and list grants awarded in that year. If a funder does not have a Web site, use Guide to U.S. Foundations, Their Trustees, Officers, and Donors (Call number: 361.7632 G941 Grants), or Foundation Directory Online Professional, to determine if the foundation publishes an annual report, application guidelines, or a program policy statement. You may call, email, or write the foundation for a copy to be sent to you.
Foundation 1000
Call number: 361.763 F825o Grants
Indexed by donors, officers and trustees, subjects, types of support, and geography. Its strength is its in-depth analyses of the 1,000 largest foundations.

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