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Corporate foundations

corporate foundations buildings

Definition of corporate foundations

A corporate foundation is a type of foundation. This means that it is a non-profit organisation, different from the company. It is part of the private foundation family. The characteristic of this one is that the majority of the funds are coming from one source. The corporate foundation’s source is: an enterprise and its employees. Also called an enterprise foundation, this is a very common way for companies to do good.

Behind the concept

Different ways to fund the corporate foundation. It can be from an original fund. In this case, the money is given once, and the foundation has to operate on this fund. In other cases, the incomes are coming at different times. Seeing that the funds have to come from one enterprise, it can be under the form of annual donations or fundraising organised by the company. Another way for an enterprise to support a foundation is by paying the salary of the organisation’s employees.

The foundation, even if it has the name of the company, is an independent entity. It has a legal body different from its funder. The importance of the ties between the two varies each time.

How does the corporate foundation have an impact? The way the most use is to give to another nonprofit, a public one, who has a specific purpose and take actions.

Around the world

Originally, having a corporate foundation was good for tax purposes. But it isn’t the case overall anymore. In the United Kingdom, for instance, donations are relieved from taxes. It makes it different. In this country, companies set up foundations for practical or ideological reasons: motivation of the founder, having an entity dedicated to the giving process…

In other countries such as in Belgium and France, the tax exonerations are a big incentive. This is a way for enterprises to have an impact, improve their brand image and have a less important tax bill at the end of the year.

Useful links

https://www.theguardian.com/society/2007/jun/13/societyguardian.societyguardian2

 

More resources

Now that you know what is a corporate foundation, you may want to see other types of foundations.

Discover the best practices to manage a corporate foundation here.