Google Answers Logo
View Question
Q: Non-profit foundation ( Answered,   0 Comments )
Subject: Non-profit foundation
Category: Business and Money > Finance
Asked by: clutch22-ga
List Price: $20.00
Posted: 23 Jan 2003 08:56 PST
Expires: 22 Feb 2003 08:56 PST
Question ID: 147486
How do I set up a non-profit foundation?

Request for Question Clarification by byrd-ga on 23 Jan 2003 09:18 PST
Hello Clutch22,

There's quite a bit of information available on this topic, but could
you please clarify a few things so Researchers would have a better
idea of what sort of information you're looking for?

1) Are you interested in setting up a *foundation* as a grant-making
entity for managing the disbursement of existing or planned funds, or
are you primarily interested in receiving monies for educational,
charitable, or other potentially non-profit activities?  Traditionally
a foundation describes the giving entity (though it also receives
monies in order to have the wherewithal to give), while *non-profit
organization or corporation* describes the receiving entity, which is
engaged in some approved non-profit-type activity.

2) Where are you located?  There are different procedures in different
countries and within countries by state or province, etc.

Clarification of Question by clutch22-ga on 23 Jan 2003 11:34 PST
Firstly, this would be based in California.  Secondly, I am a high
school Athletic Director seeking to establish a vehicle whereby we can
solicit contributions, donations, etc that would specifically be used
to "enhance" athletics.  I'd want to be able to keep the funds & the
operations of the "foundation" out of the hands of the school
district, thereby keeping the district from "tapping into" these
monies during times of a budget shortfall or allowing the district to
pull back on the funds allocated to athletics in the annual budget.
Naturally, allowing contributions/donations to be tax-deductible to
the donors will probably greatly enhance our ability to attract more
money.  Add to that, that we (the "foundation") would envision using
some of the funds to employ some of our students to assist the
athletic department in various endeavors.  Also, we envision
establishing small college scholarships to be awarded to students who
have participated in our high school's athletic programs.  We envision
awarding these scholarships not to students who will continue their
athletic careers in college, but to those who've played on our teams
throughout their high school careers & will now focus their
competitive juices towards persuing other goals.
So, we would be both receiving & disbursing funds.  We'd like to be
able to function on a taxexempt, or non-profit, status & allow our
donors to receive tax "write-offs" for their contributions/donations.
Subject: Re: Non-profit foundation
Answered By: byrd-ga on 23 Jan 2003 16:28 PST
Dear Clutch22,

Thank you for your clarification.  I appreciate the opportunity to
help you with this very worthy quest.  Should you need any further
clarification after this answer is posted, please do ask before rating
and closing the question so that I can ensure you’re satisfied with
the information provided.  Also, I do need to emphasize that I am a
Google Researcher, not a tax professional nor an attorney or
accountant.  I would strongly urge you to consult a professional to
assist you in establishing your organization, as this is a complex
process which an untrained person(s) should not attempt to do alone if
it is to succeed in meeting all requirements.  Furthermore, once you
have established your organization, you will certainly need further
professional services to help you with the ongoing complex financial

It is, however, prudent to arm yourself with as many facts as possible
first.  Therefore, and since I’m still not certain which type of
nonprofit organization would be most suitable for your purposes, I’ll
try to provide you with as much general information as I can on the
subject of starting a non-profit organization.  It will be up to you
and your professional advisor(s) to make the determination as to which
type of organization best meets your needs.

Both foundations and other non-profit corporations or charities
collect and disburse funds for particular goals.  The biggest
difference is in the types of funds, and in how they are collected,
managed and disbursed.  Foundations generally receive and administer
monies mainly from estates, corporations, or large private donors. 
Typically, these funds are invested, with the return on those
investments going to funding specific grant requests from non-profit
organizations.  Non-foundation, non-profit organizations or charities,
on the other hand, are those who seek grants from foundations for a
particular purpose, who seek tax-deductible contributions from
individuals and small companies, and who hold other fund-raising
activities to pay for specific stated goals.

In a nutshell, the steps you’ll need to take will include 1)
Formulating a mission statement, and deciding on the type of
organization you will be, 2) Filing articles of incorporation with
your state, and 3) Filing for tax exempt status with the IRS.

In more detail: 

Familiarize yourself with the types of organizations available and try
to determine which best fills your requirements.   A way to help with
this task is to formulate a mission statement.  Here’s an article with
good information on how to do that, and what kinds of questions you’ll
need to answer (along with good general advice on starting a

More good suggestions are available here in the form of PDF files you
can download:

Also, here are some general definitions of terms: 

--Non-profit Organization: An entity with the following
characteristics that distinguish it from a business enterprise: (a)
contributions of significant amounts of resources from providers who
do not expect proportionate return, (b) operating purposes other than
to provide goods or services at a profit, and (c) absence of ownership
interests like those of business enterprises

--Non-profit Corporation: An incorporated nonprofit organization which
is not intended to operate for profit, but rather is barred by law
from making a profit.

--Foundation: Grantmaking foundations are nonprofit, charitable,
tax-exempt organizations which provide grants to support a wide
variety of charitable causes and concerns. They are created by gifts
of money, stock or other resources from individuals, families and
corporations which wish to dedicate some of their private resources
toward serving the public good. These gifts or assets are typically
invested and the income generated is used to make grants.

     Foundations can be divided into several distinct types, as
	1) Private Foundations
	2) Community 
	3) Corporate  
	4) Operating

See more information on foundations, types of foundations and what
they do here:

--Charity: Charities are a large and diverse group of nonprofit
institutions that play a key role in American society and help to form
and strengthen communities. With the help of millions of volunteers
and the generosity of countless donors, they provide many services and
perform many functions that in other countries are largely the
monopoly of government. Charities are the only nonprofit organizations
defined by section 501(c)(3) of the Internal Revenue Code.

File your articles of incorporation with the State of California: 

California Associations and Nonprofit Corporations Law:

California Secretary of State:

More California laws pertaining to nonprofits:

California Corporations Code:

Site to select/read from the entirety of California law:

Apply for tax-exempt status with the Internal Revenue Service:

The Internal Revenue Service Code applicable to nonprofit
organizations is available here:

Here are some links to further information and assistance on
foundations, nonprofits, and charities:

This an excellent free resource for those who wish to start a
nonprofit organization in California, with state-specific as well as
good general information:
These sites contain a wealth of information about foundations and
nonprofits, both in general, in California, and specifically related
to educational goals:

The Council on Foundations: 
The Foundation Center: 
The Foundation Incubator: 
The Regional Association of Grantmakers:
Northern California Grantmakers: 
School Grants: 
 --Links to further resources:
Foundation in a Box:

There is also a good general discussion on starting a foundation here: .

Here is a link to a book you can purchase, entitled “How to Form a
Nonprofit Corporation in California:”

And here’s a link to another book, entitled, “Creating and Funding
Educational Foundations: a Guide for Local School Districts,” that
looks to specifically address your particular needs.  You can buy it

Best of luck with your plans.  Again, if you need any further
clarification, please do ask before rating/closing the question.


Search terms used:

California laws nonprofit formation activities
Creating a foundation
Starting a foundation
Starting a nonprofit
Starting a foundation in California
Starting a nonprofit in California
California foundation law
California nonprofit law
There are no comments at this time.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy