What is a Corporate Foundation?
What is the difference between a corporate foundation and a corporate giving program?
What can a giving program do for my company?
What is a Corporate Foundation?
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.
What is the difference between a corporate foundation and a corporate giving
program?
Corporate Foundation:
A corporate (company-sponsored) foundation is a private foundation that derives 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 endowment, and is subject to the same rules and regulations
as other private foundations.
Corporate Giving Program:
A corporate giving (direct giving) program is a grantmaking program established and administered within a profit-making
company. Gifts or grants go directly to charitable organizations from the corporation. Corporate giving programs do not have a
separate endowment; their expense is planned as part of the company's annual budgeting process and usually is funded with
pre-tax income.
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.
For additional information, see:
The Foundation
Center for a list of the the differences between corporate
foundations and giving programs.
The Council
on Foundations differentiates between corporate foundations
and giving programs, and links to several resources.
What can a giving program do for my company?
A good giving program can help support your corporate mission and even enhance your bottom-line.
Just like private individuals, many companies give to their communities because it is simply the right thing to do. Most are
in fact motivated to give by a variety of factors. Many business leaders have discovered, for example, that corporate giving
helps improve a company's bottom line and that a business can do well by doing good.
The bottom-line benefits of giving are far-ranging and include:
- Competitive advantage in attracting and retaining employees;
- Closer relationships with community leaders and officials;
- Greater customer loyalty;
- Increased positive name recognition and brand awareness;
- Leadership development opportunities for employees;
- Enhanced reputation and standing in the community;
- Beneficial business-to-business relationships with nonprofits;
- A reservoir of goodwill within the community that can serve a company in a time of crisis;
- Improved internal communications and sense of common purpose;
- Exposure of staff to new ideas, points of view, and important social movements; and
- Healthier, more livable, and economically stronger communities.
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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