Foundations typically fund nonprofit public charities, as defined in Section 501(c)(3) of the Internal Revenue Code. These are organizations whose purposes are charitable, educational, scientific, religious, literary, or cultural.
By and large, foundations do not make grants to anyone starting a for-profit business including to individuals for inventions or patents. If you are seeking funds to develop or market your invention, please consult the resources below for more information. Check out the business section of your local public library, too.
Social enterprise & fiscal sponsorship
If your invention has a strong social mission, it might fall into the category of social enterprise. Social enterprise, also known as social entrepreneurship, broadly encompasses ventures of nonprofits, civic-minded individuals, and for-profit businesses that can yield both financial and social returns.
A small but growing number of foundations provide program-related investments (PRIs) to social enterprises as well as nonprofits. PRIs are low-interest loans that a foundation can give to organizations or projects that match the funder's interests.
Another possibility: Seek a nonprofit that will act as your fiscal sponsor. Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack exempt status. This would allow you to seek grants and solicit tax-deductible donations under your sponsor's exempt status. An fiscal sponsorship between a nonprofit and a potentially for-profit business is rare and an attorney with a lot of experience in nonprofit law would be a must.
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