A charitable foundation is a nonprofit organized to provide funding to projects that help people. In the United States, 75,187 private and public foundations provided a total of $19.1 billion in grants to charitable causes in 2006, according to the Foundation Center.

History

The act of giving to help others has roots in ancient religious traditions and democratic principles, but it wasn't until the early 20th century that wealthy individuals began to perform their charitable giving in an organizational form, according to the Council on Foundations. During the early 20th century, wealthy business leaders like Andrew Carnegie and John D. Rockefeller organized their charitable giving in a corporate form, similar to business corporations with boards of directors.

Private Foundations

There are two basic types of foundations, private and public. A private foundation isn't supported by public funds, but by an individual, a family, a corporation or some combination. Private foundations include the Bill & Melinda Gates Foundation (family) and the Wal-Mart Foundation (corporate).

Public Foundations

Public foundations receive more than one-third of their funding from multiple donors, which can include individuals, private foundations and government. Examples of public foundations are the Silicon Valley Community Foundation and the Global Greengrants Fund.

Tax Exemption

Because of the assistance they provide to people, foundations might be exempt from paying federal, state and local taxes. To be tax-exempt, foundations must be organized exclusively for purposes recognized as exempt by the IRS.

Grant Guidelines

The foundations of today have varied operating styles and guidelines for what they will fund. Grant guidelines for a particular foundation can be obtained by contacting them directly or by checking their websites. Many foundations also post their grant-making guidelines at the Foundation Center website.

Source:

Highlights of Foundation Giving Trends

Council on Foundations, "An Abbreviated History of the Philanthropic Tradition in the United States"

Foundation Center "Foundation Fundamentals, 8th Edition"

Resource:

Foundation Center "Foundation Fundamentals, 8th Edition"