What is the difference between a company-sponsored foundation and a corporate direct giving program?
Corporations provide support to nonprofits through direct-giving programs, private foundations, and/or public charities. This can sometimes be a source of confusion for grantseekers. Here are some of the elements that may help to distinguish between the two types of corporate giving:
- are separate legal entities, maintain close ties with the parent company, and their giving usually reflects company interests.
- can be private foundations or public charities.
- generally maintain small endowments and rely on regular contributions from the parent company and/or subsidiaries to support their giving programs.
- often grow their endowments in profitable years and tap them in leaner years.
- must follow the appropriate laws governing private foundations or public charities, including public disclosure requirements.
Corporate Direct Giving Programs:
- are not separate legal entities, so they are not subject to laws governing exempt organizations, including public disclosure requirements.
- do not have an endowment.
- are often employee-driven and local community-related.
- may include employee matching gifts and in-kind gifts as part of their grantmaking activities.
- are often used to support programs that do not fall within the guidelines of the company-sponsored foundation.
Keep in mind that corporate giving, regardless of its form, is closely tied to the corporation's business interests. Thus, their programs often are designed to benefit employees, their families, or communities where the company conducts business.
Learn more now about corporate fundraising with Introduction to Corporate Giving. Available free as an online webinar or in-person class.
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Explore resources curated by our staff for this topic:
Adler & Colvin
A Basic Guide to Corporate Philanthropy
Provides a comparison of the basic legal distinctions between different corporate giving options, including a company foundation, direct giving and a donor-advised fund.
CECP (Chief Executives for Corporate Purpose)
CECP (Chief Executives for Corporate Purpose) leads the business community in raising the level and quality of corporate giving. CECP is a coalition of CEOs united in the belief that societal improvement is an essential measure of business performance. Formerly known as Committee Encouraging Corporate Philanthropy.
Comparison of Corporate Foundation Options
This article by a CSR consultant firm (corporate social responsibility) discusses alternatives to starting a corporate foundation, and the pros and cons.
Is It Time to Form a Corporate Foundation?
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