Where can I find information on starting a grantmaking foundation?

If you intend to raise funds from the public, rather than starting out with an endowment of your own that you will use to make grants, you will almost certainly be forming a public charity rather than a private foundation. If you are unsure whether you will be starting a public charity or a private foundation, you may want to read our FAQ, "What is the difference between a private foundation and a public charity?" Information on establishing a public charity can be found here.

Although most people who use Foundation Center resources are grantseekers affiliated with public charities, occasionally people approach us with an interest in setting up their own grantmaking foundation. For specific information on this topic, you may want to contact the Council on Foundations, a national nonprofit membership association of grantmaking foundations and corporate givers. The Council on Foundation's Web site offers a section on starting a foundation, which presents resources as well as information on the different types of foundations.

There may also be a regional association of grantmakers in your part of the country that has information on starting a foundation. See the Forum of Regional Associations of Grantmakers' Web site for a directory of such associations.

In addition, there are a number of books and articles that address many of the issues involved in starting a foundation. Some particularly useful titles are:

• Alexander, Jan. "Laying a foundation." Robb Report Worth 13 (July 2004) p. 126-7, 129. Here's why establishing a family foundation might not be the most appropriate charitable vehicle for all families, even though it may afford prestige.

• Beggs, Sarah, Erica C. Johnson, and Jack Thomas (eds.) The New Foundation Guidebook: Building a Strong Foundation. Bethesda, MD: Association of Small Foundations, 2003. Experts and representatives from various philanthropies provide advice on starting a foundation. Topics covered include vision and mission statements, board members, tax and legal issues, financial management, grantmaking, and grantmaker associations. Articles have previously appeared in newsletters and other publications by the Association of Small Foundations.

• Clohesy, Stephanie, Rob Di Leonardi, and Kim Fierman (eds.) Foundation In a Box. Bethesda, MD: Association of Small Foundations, 2003. Composed of six volumes: Volume 1: Introduction; Volume 2: Boards; Volume 3: Investments; Volume 4: Tax & Legal; Volume 5: Grantmaking; and Volume 6: Administration. Various specialists have contributed chapters to the set.

• "Creating a Mission for Your Foundation: Setting a Course Meaningful to You." Association of Small Foundations 9 (Summer 2005) p. 1-4.

• Edie, John A. First Steps in Starting a Foundation. 5th ed. Washington, D.C.: Council on Foundations, 2001. Written for the non-lawyer, the grantmaker, and the person seeking advice on establishing a foundation.

• Freeman, David P., John A. Edie, Jane C. Nober, and staff of the Council on Foundations. The Handbook on Private Foundations. 3rd ed. Washington, D.C.: The Council on Foundations, 2005.

• Healey, Judith K. Voyage of Discovery: A Planning Workbook for Philanthropic Families. Washington, DC: National Center for Family Philanthropy, 2001. A planning tool intended for family members and trustees of family foundations, the book provides a structure and process for assessing current programs and giving while also examining the founder's legacy.

• Hopkins, Bruce R. and Jody Blazek. Private Foundations: Tax Law and Compliance. 2nd ed. Hoboken, NJ: John Wiley & Sons, 2003. Intended as a desk reference for lawyers, accountants, and tax practitioners, covers federal tax laws related to the establishment of private foundations, disqualified persons, self-dealing, mandatory distributions, excess business holdings, investments, taxable expenditures, tax on investment income, unrelated business tax, tax compliance and administrative issues, termination, charitable giving rules, and the distinction between private foundations and public charities, and donor-advised funds. Appendices include sources of the law, Internal Revenue Code sections, table of cases, table of IRS revenue rulings, and an index.

• McCoy, Jerry J. and Kathryn W. Miree. Family Foundation Handbook. 2006 ed. Chicago, IL: CCH Incorporated. 2006. A handbook for financial and legal advisors to family philanthropies, but also provides information and guidance of interest to laypeople. Covers basic legal and fiscal matters. Provides numerous worksheets, forms, and tables, as well as IRS statutes and Treasury Department regulations.

• Private Foundations vs. Community Foundations & Donor Advised Funds. Fairfield, CT: Foundation Source Philanthropic Services. 2005. Side-by-side comparison of three philanthropic options.

• Silk, Roger D., James W. Lintott, Christine M. Silk, and Andrew R. Stephens. Creating a Private Foundation: The Essential Guide for Donors and Their Advisors. Princeton, NJ: Bloomberg Press, 2003. Covers both philosophical and practical aspects of establishing and managing a family foundation. The emphasis is on planned giving, and the authors point out the tax advantages of a foundation over other types of charitable activity.

• So You Want to Give?: Options for Giving. Grandhaven, MI: Council of Michigan Foundations, 2001. A look at the advantages and disadvantages of creating a private foundation, creating a fund within a community foundation, establishing a support organization, and developing a corporate giving program or corporate foundation. Though primarily designed for residents of Michigan, much of the advice is still useful no matter where you live.

• Starting a Private Foundation. 4th ed. Washington, D.C.: Forum of Regional Associations of Grantmakers, 2001. A booklet on setting up a private foundation. Topics covered include the benefits of private foundations; considerations before establishing a foundation; organization and management issues; reporting requirements; and grantmaker associations.

• Steenhuysen, Jay. "Three Vehicles for a Vision." Robb Report Worth 12 (December 2003) p. 164, 166, 168. Explains the options for establishing a private foundation, a supporting organization, or a donor-advised fund, and how to determine which is the best vehicle for charitable giving.

For other books and articles on starting a foundation, try searching our Catalog of Nonprofit Literature (CNL), the Center's bibliographic database. You could start searching on the subject "Foundations--establishment and termination" or "Laws regulating philanthropy".

Many of the books and articles found through CNL can be located in Center Libraries and some Cooperating Collections. It is best to call ahead to verify a specific library's holdings.

At some point, you will likely want to consult legal advice. For a list of lawyers who specialize in nonprofit issues and practice in your local area, refer to the Martindale-Hubbell Lawyer Locator using one of the following terms in the "Or enter specific area of practice" box:

Charitable Giving
Charitable Limited Partnerships
Charitable Organizations Law
Charitable Trusts and Foundations
Nonprofit Organizations Law
Nonprofit Tax Law
Private Foundations
Public Charities
Tax Exempt Organizations

Once you've established your grantmaking activities, you may want to visit the Grantmakers area of the Foundation Center's Web site. Here you will find information on how the Center can help you create and host a Web site for your foundation as part of our Foundation Folders Initiative. There is also information on how you can speed up the process of grants reporting by participating in the Center's Electronic Grants Reporting program. Many other resources and services for grantmaking foundations can be found in the For Grantmakers section of the Center's site as well.

See also the FAQ entitled "How do I start a nonprofit organization?"

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