A foundation is typically a non-profit organization that raises money or offers a service for a specific cause or purpose. The key component of starting and operating a successful foundation is to think of the foundation as a business. So, starting a foundation requires the founder to do a lot of research and homework upfront, get specific on the mission or purpose, follow any legal requirements and plan for all of the different aspects of the foundation.
Before starting a foundation, it is important to spend a lot of time researching various aspects of starting a non-profit organization and operating a charity in general. One of the primary research goals is to find out about other organizations that support the cause of the foundation being started. Part of the research is to determine where there may be a niche or area that is not currently being serviced by another organization.
For example, there are numerous organizations that support the homeless. During the research phase, it may be discovered that there is need for a charity that helps the homeless go back to school and get an education.
Researching the cause should lead to a very specific purpose or mission for starting a foundation. Once the specific purpose is nailed down, continue the research to find statistics and facts about the specific niche the foundation will be servicing. Having a clear purpose provides a clear direction, not only for starting a foundation, but also for continuously operating it in a successful manner.
When starting a foundation, there are numerous filings and paperwork that need to be completed with both local and federal agencies. The founder of the organization must be aware of the legal requirements for opening and operating a foundation that is not for profit. In the US, it is best to contact the Secretary of State for the state where the foundation will be headquartered to find out the specific legal details of starting and running the foundation. In other countries, any governmental entity that licenses these types of foundations will be the first stop to fulfill any legal requirements.
Typically, starting a foundation requires the charity to apply for and obtain a business license. The founder also needs to choose a business structure for the charity, such as a corporation or limited liability company (LLC). In addition, the foundation may be eligible for a tax-exempt status, so the founder needs to make sure that the proper paperwork is filed for the tax status of the organization.
Finally, starting and running a foundation requires it to be run similar to any type of business. This requires a plan for all of the different aspects of the foundation. A plan should be put in place for marketing, development, programs, finances, administrative needs and any other departments or areas that are required for the foundation to stay up and running.
