Corporate foundations are usually incorporated under state law as nonprofit corporations or organized as charitable trusts. They are recognized by the Internal Revenue Service as tax-exempt organizations. They are typically launched with a single gift that becomes the endowment, which may be added to annually or when, and if, profits allow.

The foundation is governed by a board of directors, usually the company owner(s) and key executives, although leaders from corporate headquarters communities have been known to be included.

Corporate foundations are often operated as "flow-through" or "conduit" foundations that distribute their assets soon after they are received.

Grantmaking decisions are usually made by the board of directors or trustees, although discretion up to a specific dollar level is usually given to the foundation president or executive director.

Corporate foundations are governed by state and federal laws that prescribe set-up, record keeping, and other administrative activities.

For additional information on starting a corporate foundation, see Starting a Private Foundation or First Steps in Starting a Foundation, listed in the Corporate Resources section.

Text reprinted with permission from the Forum of Regional Associations of Grantmakers

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