Key Term

What is Foundation?

Definition

A foundation is a non-profit organization that is established as a legal entity to distribute funds for charitable, educational, religious, scientific, or other purposes that serve the public good. Foundations are typically created through a single primary donation from an individual, family, or corporation, and make grants to other charitable organizations or directly operate charitable programs using income generated from invested assets.

Significance

Foundations play a crucial role in the philanthropic landscape by providing sustainable, long-term funding for charitable causes. They serve as important intermediaries between wealthy donors and charitable organizations, offering tax advantages while creating lasting charitable legacies. Foundations can influence social change through strategic grant-making, shape public policy through their research and advocacy, and address complex societal challenges that may require sustained, multi-year funding commitments. Their endowment-based model allows them to maintain consistent charitable giving even during economic downturns, providing stability to the nonprofit sector.