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What is a foundation? What's the difference between a community
foundation and a corporate foundation? What is the nonprofit
or independent sector? How much do individuals give and volunteer?
This section answers these and other questions.
What is a foundation?
What is a public foundation?
What is a private foundation?
What is an independent foundation?
What is a community foundation?
What is a corporate foundation or giving program?
What is the nonprofit sector?
What are the major categories of nonprofits?
What was the total giving in the U.S.
for 2002?
National nonprofit size & scope
Revenues
Employment
Regional Giving Studies
Giving and Volunteering in the U.S.
Some of the many other organizations focused
on volunteering include
What
is a foundation?
A foundation is a non-governmental, nonprofit organization,
with funds and programs managed by its own trustees or directors,
established to aid social, educational, charitable, religious,
or other activities serving the common welfare, primarily
through the making of grants.
Grantmaking foundations are created by gifts of money, stock
or other resources from individuals, families or corporations
that wish to dedicate some of their private resources toward
serving the public good. These gifts or assets are typically
invested and the income generated is used to make grants.
Foundations can be divided into several distinct types:
Certain organizations are excluded which bear the name "foundation"
but whose primary purposes are other than the awarding of grants.
Examples include public charities making general appeals to
the public for funds for the organization's own programming,
acting as trade associations for industrial or other special
groups, or functioning as endowments set up for special purposes
with a specific organization.
What is a public
foundation?
Public foundations receive at least one-third of their income
from the general public. Community Foundations are a type
of public foundation and are organized to serve specific geographic
regions, and receive their support from a variety of donors,
rather than a single family or company. Other public foundations
also make support from a variety of donors but for a specific
issue such as health or arts.
What is a private
foundation?
A private foundation includes family foundations created by
individuals and families as vehicles for carrying out their
charitable vision.
What is an independent
foundation?
Independent foundations were most often originally organized
as family foundations, but over a period of time family involvement
in the leadership has declined.
What is a
community foundation?
Community foundations receive and administer endowment and
other funds from private sources and manage them under community
control for charitable purposes primarily focused on local
needs. Community foundations are characterized by multiple
sources of funding from many donors, and expenditures are
for the benefit of a specified geographic area. By Internal
Revenue Service regulation, the governing bodies of community
foundations are required to represent broad community interests.
Community foundations are classified by the IRS not as private
foundations but as "public charities," like churches, schools
and colleges, hospitals, and certain other nonprofits.
What is a corporate
foundation or giving program?
A corporate foundation is a private foundation under the tax
law and derives its funds from a profit-making company or
corporation. It is independently constituted and its purpose
is to make grants often on a broad basis. Officers of the
company, as well as persons not affiliated with the company,
may serve on the board. It is not uncommon for a company-sponsored
foundation to assume responsibility for the parent company's
giving in areas in which offices, production or service facilities,
or distribution outlets are located. The corporate foundation
makes it possible to set aside funds for use in future years
when company earnings may be reduced, and the needs of charitable
organizations are usually greater. Sometimes annual grants
are equal to or exceed assets.
Corporate foundations should be distinguished from "corporate
giving programs," which are administered within the corporation.
The latter may make grants for limited purposes closely associated
with the interest of the corporation, although this is not
always the case. The two types of giving are often coordinated
under a general policy and may be administered by the same
staff. In other cases, a private foundation bearing a name
associated with a corporation may have few if any ties with
the original source of funds. In this case, it becomes an
independent foundation and is no longer considered a corporate
foundation.
What is the nonprofit
sector?
The nonprofit sector is the collective name used to describe
institutions and organizations in American society that are
neither government nor business. Other names often used include
the not-for-profit sector, the third sector, the independent
sector, the philanthropic sector, the voluntary sector, or
the social sector. Outside the United States, nonprofits are
often called non-governmental organizations (NGOs) or civil
society organizations.
The nonprofit sector in the United States is vast and diverse.
It includes more than a million organizations that spend nearly
$500 billion each year. About six percent of all organizations
in the U.S. are nonprofits. Section 501(c) of the tax code,
which outlines the types of organizations eligible for tax
exemption, lists more than 25 classifications of nonprofits.
The nonprofit sector serves as a forum for the discussion
and dissemination of new ideas, an efficient vehicle for delivering
social services, and a guardian or our environment, values
and heritage.
What are the major
categories of nonprofits?
Charities, foundations, social welfare organizations, and
professional and trade associations are the major categories
of nonprofit organizations.
What was the total giving
in the U.S. for 2002?
Source: Giving USA, published by the AAFRC Trust for
Philanthropy; researched and written by The Center on Philanthropy
at Indiana University. For additional information see www.givingusa.org.
National nonprofit
size & scope
- Organizations
- Charities (501(c)(3) organizations): 654,000
- Social welfare organizations (501 (c)(4) organizations):
140,000
- Religious organizations: 341,000
- Total independent sector organizations: 1.14 million
Revenues
- Total independent sector revenues: $621.4 billion
- Percentage of the national economy: 6.2 percent
Employment
- Independent sector employees: 10.2 million
- Percentage of total U.S. workforce: 6.9 percent
Regional Giving Studies
Indiana Gives 2000: Hoosier Hospitality to Charitable Organizations,
the Center on Philanthropy at Indiana University, the report
can be found at http://www.philanthropy.iupui.edu/IndianaGives2000.pdf.
Giving and Volunteering
in the U.S.
For 1.6 million charities, nonprofit organizations, and religious
congregations in the United States, giving and volunteering
is at the heart of citizen action and central to their operations.
American society as a whole benefits from the financial support,
commitment, skills, and enthusiasm of those who give and volunteer.
Public participation, volunteering, and financial gifts to
cases people believe in make for a vibrant civil society.
According to the Independent Sector's most recent Giving
and Volunteering survey, in 1999 the number of individuals
who volunteered reached its highest recorded level-almost
56%. The average hours volunteered per week were 3.5, with
an estimated 109.4 million adults volunteering. Based on the
latest data available, the assigned hourly wage for volunteers
is $15.39.
Some of the many
other organizations focused on volunteering include:
America's Promise
909 N. Washington Street
Suite 400
Alexandria, VA 22314
703-684-4500
www.americaspromise.org
Association for Volunteer Administration
P.O. Box 32092
Richmond, VA 23294
804-346-2266
www.avaintl.org
Corporation for National and Community
Service
1201 New York Avenue, NW
Washington, D.C. 20525
202-606-5000
www.cns.gov
Points of Light Foundation and the
Volunteer Center National Network
"Family Matters"
1400 I Street, NW
Suite 800
Washington, DC 20005
202-729-8000
800-VOLUNTEER
www.pointsoflight.org
familymatters@pointsoflights.org
Partial text reprinted with permission from the Forum of Regional
Associations of Grantmakers.
©2003 Indiana Grantmakers Alliance, Inc.
32 East Washington Street, Suite 1100
Indianapolis, Indiana, 46204
Phone: (317) 630-5200 | Fax: (317) 630-5210
Email: info@indianagrantmakers.org
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