Foundation Basics

In the field of philanthropy, the term "foundation" has no precise meaning. The Internal Revenue Code  governs the operations of both private foundations (including family, independent, and company  foundations) and public charities (community foundations  and those nonprofit charitable organizations which raise funds to conduct their programs and operations). The rules governing private foundations are stricter in limiting foundation activities than are those for public charities.

When starting a foundation, it is essential for the donor or the donor's advisor  to comprehend - at the outset - the basic legal rules that govern the formation and regulate the activities of foundations. And, while legal considerations are important, there are additional considerations in starting a foundation:

• How much administration and management do you wish to take on yourself or do you want to delegate?
• What degree of control do you want over the funds?
• Is family unity one of the motivations?
• Do you view philanthropy as a tool to transmit values?
• Should there be a mission statement?
• Will outside applications for grants be accepted?
• How will you decide grantmaking priorities and communicate them to the public?
• Is a private foundation the right choice for me? 

Council Publications

The Council on Foundations produces a variety of publications and newsletters to keep you and your organization "in the know." Tapes and CDs from Council Conferences can also be ordered.

• Community Foundation Handbook: What You Need to Know 
• The Family Advisor: Starting a Family Foundation 
• First Steps in Starting a Foundation, Fifth Edition 
• The Guide to Small Foundation Management--From Groundwork to Grantmaking 
• Philanthropic Foundations in the United States: An Introduction 
• Rules of the Road: A Guide to the Law of Charities in the United States 
• Small Can Be Effective 
• Tax Treatment of Charities 

Keeping Current

• Chronicle of Philanthropy 
• Foundation News & Commentary (FN&C)- archives
• Harvest Today: The Philanthropy News & Information Service 
• A Guide to the Philanthropy Trade Press 
• Literature of the Nonprofit Sector  
• The Nonprofit Times 
• Philanthropy News Digest 
• PNN Online: The Nonprofit News & Information Resource 
• Starting a Private Foundation 

Additional Resources

• Center on Philanthropy at Indiana University 
• Facts & Figures (Chronicle of Philanthropy)
• Foundation Center 
• Giving USA | American Association of Fundraising Counsel 
• GuideStar 
• Independent Sector 
• Great Grants 

Tax Information

• IRS: Charities & Non-Profits 
• IRS: Form 1023 
• IRS: Instructions for Form 1023 
• IRS: Form PF 990 
• IRS: Private Foundations 
• IRS: Publication 578 
• IRS: Publication 4220: Applying for 501(c)(3) Tax Exempt Status 
• IRS: Publication 4221: Compliance Guide for 501(c)(3) Tax-Exempt Organizations