Fundraising Part 4 of 6 - Foundations - There Are Only 4 Basic Sources of Contributed Income

There are only 5 basic types of Foundations.  Foundations, like non profits, are 501(c)3 organizations or a similar non profit status.

A Family Trust is what it sounds like.  It is when instead of giving from their check book or stock options, a family forms a more formalized structure and gives from their trust.  This is often managed by a family who has living individuals that make decisions on who gets their donations.

A Community Foundation is a non profit that has been set up and that collects donations from a community then sets up a system to give out those donations.  A Community Foundation is governed by a Board just like other non profits.  The Board tends to set policy on what they feel are the greatest needs of their communities than establish procedures for how funds can be applied for.  See our Blog post from May 19, 2013 for an example of how to apply to one specific Community Foundation.  NOTE:  All Community Foundations are different!  So make sure to research the one in your community!

A Private Foundation is another example.  Sometimes they are similar to Family Trusts, when it is named for a family it is often set up in a way that if all members of a family passed away gifts would still be made to the causes they find most important.  Sometimes it is a group of people not related or a group of businesses with common interests that come together to form a foundation.  Just like Community Foundations, they most often have specific application procedures.

Corporate Foundations, as briefly touch upon in the 8/14/13 Blog, are a corporation's more philanthropic was of giving over sponsorship dollars.  As a review, sponsorship means a corporation expects to receive value back for it's gift.  A Corporate Grant tends to mean logo not required and is given for more philanthropic reasons.  For example, PNC Bank has a corporate foundation that focuses on education and early childhood development.  Often large corporations - Bank of America, Target, Walmart, etc. - establish foundations to help with their tax burdens.  Just like Community Foundations and Private Foundations there are processes and procedures to which you must apply through.  Research needed.

The fifth type of foundation is an Operating Foundation.  This is typically not a good foundation to apply for money for.  Operating Foundations are non-profits that are allowed to make all their donation to themselves.  Yes, sounds odd but it is correct.  They are 501(c)3's that work to do public good, can collect donations, than fund their operating needs to continue the public good.

What is the same for all of these foundations is:

The IRS requires that independent / private and corporate foundations pay out at least 5% of the year-end fair market value of their assets.

So again, please do your research so you know which or how many of these are appropriate for you to be applying to!  And next month we promise to provide grant writing tips!

Next up... Individuals... WHERE THE MONEY IS AT...