Types of Foundations

TYPES OF FOUNDATIONS

Foundations are organizations that donate funds and support to other organizations. Some foundations may also provide funding to support their own charitable programs. For grant making purposes, the business of a foundation is to make grants to support charitable programs. Each foundation has its own interests and supports projects that are within those interests.

There are five types of foundations:

  1. Operating foundations
  2. Independent foundations
  3. Community foundations
  4. Corporate foundations
  5. Public Charities

Operating Foundations

Operating foundations are established as separate entities by a parent organization to raise money for the programs and services of the parent organization. Operating foundations are commonly found in universities and hospitals, and it has become a growing trend in social service agencies and public and private schools. Public school districts have established operating foundations as a method of increasing private donations and to keep private funds separate from public funds.

Independent Foundations

Most independent foundations are foundations established by an individual or family so they are commonly referred to as family foundations. Some independent foundations may be linked to businesses, but they represent private giving. Family foundations may be administered by family members and some are administered through bank trust officers.

Community Foundations

Community Foundations serve specific geographic areas. A Community Foundation may serve several counties, a single county, several cities, or an entire metropolitan area. Community Foundations administer pools of money from private donors and other foundations. An applicant applying to a Community Foundation could have access to multiple donor-advised funds.

Corporate Foundations

A Corporate Foundation is established as a separate legal entity by a parent company. The parent company passes along a percentage of its profits to the foundation for distribution to charitable organizations.

Public Charities

A Public Charity receives a substantial amount of money from a governmental unit or the general public and distributes it via grants to support community programs and services. Local Arts Councils are an example of Public Charities.

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