Many people want to start foundations, but few start out knowing exactly what sort of organization they are going to create. The purpose of this chapter is to help potential donors understand the many different entities that are commonly referred to as foundations and to provide an understanding of the legal framework necessary to establish a foundation.
This chapter is divided into five different parts:
Public Charities and Private Foundations: An Introduction to Tax-Exempt Charitable Organizations
Part One lays out the regulatory scheme under which charitable organizations are classified and regulated. It focuses on the distinction between public charities and private foundations and on the consequences of an organization’s being classified as one or the other.
What is a Private Foundation?
Part Two discusses private foundations. It surveys the different types of private foundations so that donors can understand the variety of forms their organizations can take.
The Community Foundation Option
Part Three discusses the community foundation, a unique form of public charity and an attractive alternative to a private foundation for many donors. It includes a discussion of donor advised funds.
Choosing the Right Type of Foundation
Part Four pulls together the definitions and distinctions from previous sections to help the reader choose the right foundation to meet his or her needs.
First Steps in Starting a Foundation
Part Five outlines the first legal steps that are necessary to establish a foundation and is aimed at readers who are ready to choose from the many alternatives.
The chapter also includes sample Articles of Incorporation and sample Bylaws as appendices.