FOUNDATION RESEARCH

 

APRA 1999

SESSION 301 - BASIC

 

SATURDAY, AUGUST 14, 1999

9:00AM – 10:15AM

Meredith Lynch

Research Analyst

University of Southern California


   

  1. WHAT IS A FOUNDATION?

The Foundation Center defines a foundation as a nongovernmental, nonprofit organization having a principal fund that is managed by its own trustees and directors, and that maintains or aids charitable, educational, religious or other activities serving the public good, primarily by making grants to other nonprofit organizations.

 

Types of Grantmaking Foundations

 

Foundation Type

Description

Source of Funds

Decision-making Activity

Grantmaking Requirements

Reporting 

 

Independent Foundation

An independent grantmaking organization established to aid social, educational, religious, or other charitable activities.

Endowment generally derived from a single source such as an individual, a family, or a group of individuals. Contributions to endowment limited as to tax deductibility.

Decisions may be made by donor or members of the donor’s family; by an independent board of directors or trustees; or by a bank or trust officer acting on the donor’s behalf.

Broad discretionary giving allowed but may have specific guidelines and give only in a few specific fields. About 70% limit their giving to local area.

Annual information returns (990-PF) filed with IRS must be made avail-able to the public. A small percentage issue separately printed annual reports.

Company-Sponsored Foundation

Legally an independent grantmaking organization with close ties to the corporation providing funds.

Endowment and annual contri-butions from a profit-making corporation. May maintain small endowment and pay out most of its contributions received annually in grants, or may maintain endowment to cover contri-butions in years when corporate profits are low.

Decisions made by board of dir-ectors often composed of corporate off-icials, but which may include individuals with no corporate affiliation. De-cisions may also be made by local company officials.

Giving tends to be in fields related to corporate activities or in communities where corporation operates. Usually give more grants but in smaller dollar amounts than inde-pendent foun-dations.

Same as above

Operating Foundation

An organization that uses its resources to conduct research or provide a direct service.

Endowment us-ually provided from a single source, but eli-gible for max-imum deductible contributions from public.

Decisions generally made by independent board of directors.

Makes few, if any, grants. Grants generally related directly to the foundation’s pro-gram.

Same as above

Community Foundation

A publicly spon-sored organization that makes grants for social, educ-ational, religious, or other charitable purposes in a spe-cific community or region.

Contributions re-ceived from many donors. Usually eligible for max-imum deductible contributions from public.

Decisions made by board of dir-ectors repre-senting the diversity of the community

Grants generally limited to chari-table organizations in local community.

IRS 990 return available to public. Many publish full guidelines or annual reports.

Courtesy of The Foundation Center

 

B. WHERE DO I FIND THE INFORMATION?

 

990-PF Forms:

The Tax Reform act of 1969 established criteria for distinguishing private foundations from public charities and created a separate category with a more favorable tax status for operating foundations. Also enacted with the 1969 Act was a stipulation that required foundations to file annual information returns with the IRS, 990-PF forms, and to make these forms available for public inspection. At the state level, these forms must be filed with the State Attorneys General which is one of many sources of foundation information.

Components of a 990-PF:

 

Where to find 990-PF Forms and other Foundation Information:

*Note of disclaimer: this list is NOT exhaustive and this presenter does not represent a particular vendor.

 

*For a complete list of State Attorneys General point your Internet browser to http://www.dontannoyme.com/state.htm

 

 

C. HOW DO I USE THE INFORMATION?

More importantly than gathering information is DOING something with it.

  1. Make a connection between the foundation and your institution

 

  1. Determine what foundations match the programming and funding needs of your institution. When searching for potential funders look for general rather than specific funding opportunities, and never underestimate the power of a well-written proposal.
  2.  

  3. Prioritize your foundation prospects based on;

 

  1. Use every method available to stay up to date on what your top foundation prospects are doing.

http://www.usc.edu/dept/source/gofetch.htm

http://www.usc.edu/source/Agents.html

This information can sometimes be more valuable to your fundraisers than

what is available on the most recent 990 form.

 

D. WHAT DO FOUNDATIONS WANT FROM US?

 

THEY WANT US TO DO OUR RESEARCH!!

Every Foundation has different restrictions and application procedures. Some will not accept proposals from unsolicited grant-seekers and some prefer that you write a new proposal each year for the same grant money. NO TWO FOUNDATIONS ARE EXACTLY ALIKE.

 

 

Something to look forward to:

Look for the Foundation Center’s "Foundation 1000" and many more foundation research tools to become accessible via the Internet in 2000. Also, just as SEC documents became available electronically, eventually so will 990-PF forms, so keep your eyes open.