Types of Foundations
Community Foundations. These foundations build their endowments through contributions from multiple donors, usually within a given geographic region. Community foundations support charitable activities focused primarily on "local" needs—those of a particular county, city, or state. They are classified as "public charities" rather than private foundations by the IRS and are therefore subject to different rules and regulations.
Corporate Foundations. A corporate (company- sponsored) foundation is a private foundation that receives its grantmaking funds primarily from the contributions of a profit-making business. The company-sponsored foundation often maintains close ties with the donor company, but it is a separate, legal organization, sometimes with its own endowments, and is subject to the same rules and regulations as other private foundations.
Independent Foundation. A grantmaking organization usually classified by the IRS as a private foundation. Independent foundations may also be known as family foundations, general purpose foundations, special purpose foundations, or private nonoperating foundations. The Foundation Center places independent foundations and company-sponsored foundations in separate categories; however, federal law normally classifies both as private, nonoperating foundations subject to the same rules and requirements.
Operating Foundation. A 501(c)(3) organization classified by the IRS as a private foundation whose primary purpose is to conduct research, social welfare, or other programs determined by its governing body or establishment charter. An operating foundation may make grants, but the sum generally is small relative to the funds used for the foundation's own programs.
Private Foundation. A nongovernmental, nonprofit organization with funds (usually from a single source, either an individual, family, or corporation) and a program managed by its own trustees or directors that was established to maintain or aid educational, social, charitable, or other activities serving the common welfare, primarily by making grants to other nonprofit organizations. (Source: The Foundation Center)
Public Charity. A nonprofit organization that qualifies for tax-exempt status under section 501(c)(3) of the IRS code. Public charities are the recipients of most foundation and corporate grants. Some public charities also make grants.
