PMA Consulting, LLC

3 Types of Charitable Foundations

As we begin February, we hope you found our entries regarding board development helpful for you and your organization. We will continue to write about topics we know are important to those who work and serve nonprofit organizations.

This month, our topic will center around foundations. We will breakdown this topic to three specific categories:

1.) Community Foundations: These are tax-exempt charitable organizations created by and for the people of the communities that they live in. Community foundations enable people with philanthropic interests to easily and effectively support the issues they care about. Donors can work with these organizations by establishing a charitable fund. This fund can accept a variety of assets (cash, stocks, bonds) and can allow the donor to recommend grants to nonprofit organizations they wish to support.

2.) Private (“family”) Foundations: A foundation that is supported by a family or a group of individuals is how we will define a private foundation. This type of foundation is set up as a forum in which family members can work toward common goals and support common sectors of nonprofit organizations. A nonprofit working closely with a private foundation can help that organization to introduce themselves to future leaders within their organizations.

3.) Corporate Foundations: A corporate foundation maintains close ties with the donor company, but is a separate, legal organization with its own rules and regulations. Currently, there are more than 2,000 corporate foundations, maintaining nearly $11 billion in assets*. This type of foundation derives its grant-making funds primarily from its for-profit corporation, so it is set up to support the priorities of its parent company.

Blog entries will be based upon the three distinct foundation categories above, giving advice and helpful hints as how to work with these important supporting organizations. As always, we value your feedback and input along the way.

*Source: Forbes.com