You’ve heard of the Bill & Melinda Gates Foundation, the Rockefeller Foundation, and maybe even the Ford Foundation. These are big names in business, which means they’re also big names in our everyday lives. But do you need to be a large company to establish a corporate foundation that can make such a powerful impact? How do you create a corporate foundation, anyway? Here’s what you need to know about creating a foundation for your charitable efforts and how Groundswell’s unique capabilities can help you make these dreams a reality without all the complicated paperwork and legal issues.
A corporate foundation is a philanthropic organization that is funded and established by a corporation. It’s a type of private foundation that doubles as a way for companies to maximize their giving potential.
Foundations serve as a channel for corporate giving. They are established by a company for charitable purposes but operate independently of the company itself.
That means that they may be funded by profits from the company or with endowments—investment funds that grow for future endeavors. Once it receives funding, the foundation then uses that money to support nonprofits, community organizations, or any other selected charities.
Technically speaking, a corporate foundation is a type of 501(c)(3) public charity known as a “private non-operating foundation.” The Internal Revenue Service (IRS) also lumps family foundations into this category, meaning that corporate and family foundations are both subject to the same regulations.
Establishing a corporate foundation provides a number of benefits for companies seeking to make a positive impact, such as:
These are only a few of the reasons companies and corporations choose to start foundations. In short, they are advantageous vehicles for charitable works, but that doesn’t mean they are without their drawbacks.
Establishing a corporate foundation requires a significant amount of vision, planning, and, of course, paperwork. Because corporate foundations exist as their own tax-exempt legal entity, there are more than a few hoops that companies need to jump through to make their giving dreams a reality.
To start a corporate foundation, a company must:
There’s a lot of good that can be done with a foundation, but not everyone has the resources to make it a reality. Thankfully, there are other options for eager philanthropists.
Establishing a foundation isn’t the only way to enhance corporate giving while also reaping rewards like tax benefits.
A donor-advised fund (DAF) is a great way to invest in your philanthropic future. These are accounts that companies can fund in the interest of future donations. DAF contributions are deducted from the donor’s taxable income, but you can then wait as long as you’d like—even years—to decide where that money will go.
DAFs can be used in place of or in conjunction with corporate foundations to maximize your giving potential. They are easier to set up and manage than a foundation, and they still enable you to send grants to your selected charities. They can even turn equities and tangible assets into cash donations. Think of it as an investment fund for all your future efforts!
There’s a lot of good that can come from establishing a corporate foundation, but what if you don’t have the time, personnel, or resources to get it off the ground? Are smaller organizations simply out of luck?
Fortunately, with a tool like Groundswell, you can get a lot of the same benefits you’d experience from starting a corporate foundation without the hassle. Our “Foundation-in-a-Box” approach is the key to corporate giving for companies that want to bypass the time-consuming effort of setting up and managing a corporate foundation on their own.
Let’s take a look at how it works.
Groundswell eliminates the guesswork of foundation building with a ready-made solution tailored to your business. Our platform is designed to feature all the tools you need to perform activities like a private foundation, such as awarding grants and making charitable donations.
With our integrated Foundation-in-a-Box approach, you can:
You worry about giving—let Groundswell handle the rest! With our corporate giving platform, you can launch your new charitable giving initiatives in a matter of days, not months. And you won’t need to validate the charitable status of your organization or worry about multiple tax statements; we’ll handle that for you.
Our accessible, user-friendly platform allows you to view your employee giving and grantmaking in one place. You’ll get everything you need to get giving without all the legal complications, expensive consultants, and extra workforce requirements.
So, if you’re on the fence about starting a corporate foundation or are interested in doing so but worried about the risk vs. reward, a more accessible option like Groundswell might be a good fit.
You don’t need to be a big corporation to start your own foundation. With Groundswell, you get everything you need on one convenient platform. Whether you’re looking for simple DAF options or want to minimize your pile of paperwork, we have a seamless solution to make it all possible.
Ready to see our platform in action? Book a demo today to discover how Groundswell can revolutionize the way you give.
