What is a Foundation?
A foundation is a non-governmental entity that is established as a nonprofit corporation or a charitable trust, with a principal purpose of making grants to unrelated organizations, institutions, or individuals for scientific, educational, cultural, religious, or other charitable purposes. For more on specific types of foundations, see below definitions.
Independent foundations, such as the Wallace Foundation, the Ford Foundation, or the W. K. Kellogg Foundation, are tax-exempt nonprofits or charitable trusts established to support the donor or donor family's philanthropic values and purposes. There are more than 70,000 independent foundations, with new ones established every day. They all have boards of directors, but otherwise vary greatly in purpose, structure, and operations. With notable exceptions, most independent foundations have little or no staff, and most have assets of less than $1M. Larger foundations with the capacity for strategic planning periodically re-evaluate their grant making agendas. In light of contemporary challenges and emerging opportunities, they may revise those agendas and guidelines to ensure maximum impact. Some large foundations recently have redirected support to international development, peace, and other issues.
A family foundation, such as the Gordon and Betty Moore Foundation, is an independent foundation in which the founding donor or relatives of the donor play an important role in the governance and/or management of the foundation. Family foundations are the fastest growing sector in the foundation world, and because cultivating strong relationships with the donor and/or donor's relatives is key to working with family foundations, they can be excellent major gift prospects.
Community foundations, such as the Charlottesville Area Community Foundation or the Community Foundation Serving Richmond & Central Virginia, are public charities funded by many donors who pool their contributions to support their community or region. Many of the nation's more than 700 community foundations also manage donor-advised funds, an alternative to a family foundation.
Operating foundations, such as the Carnegie Foundation for the Advancement of Teaching or the Pew Charitable Trusts, underwrite their own programs, research, or services, rather than making grants to other organizations. Currently, there are almost 5,000 operating foundations in the U.S.
Corporate foundations, such as the Norfolk Southern Foundation, the Starbucks Foundation, or the GE Foundation generally are the philanthropic arm of a business or corporation. A growing number of the more than 2,600 corporate foundations closely tie their philanthropic programs to their corporate goals.
What is an RFP? (Request for Proposal)
RFP is an acronym for Request for Proposal.
When a funder, such as a government agency or foundation initiates a new grant program in a specific area, it sends out RFPs to organizations that might be qualified to participate. The RFP serves to 1) announce that funding is available for projects focused on addressing a specific issue or need, 2) solicit proposals for projects that might address that need, 3) provide background on the funder, and 4) sets out the project specifications and application procedures. While an increasing number of foundations use RFPs in specific fields, most still prefer to consider proposals that are initiated by applicants. For current RFPs, see the Funding Opportunities Calendar.
What is a letter of inquiry (LOI)?
Foundation funders are generally moving away from accepting unsolicited proposals. Letters of inquiry (LOIs) are increasingly becoming a standard form of initial contact and between grant-seekers and funders. An LOI is usually a 2-3 page introduction of a grant-seeking organization’s history and mission, and summary of a proposed project, program or initiative for which the organization is seeking funding. Foundation funders review LOIs, and then make a determination on whether to invite a grant-seeker to submit a full, more detailed grant proposal. For more on writing LOIs, please contact the Foundation Relations office, or the Grant Writing Resources page.
What is the difference between a gift and a grant (also known as a sponsored project)?
Differentiating between gifts and sponsored programs is critical to assuring appropriate processing (including proposal submission and receipt), management, oversight, and reporting. As a general rule, gifts are funds donated outright to the University. These may be restricted to areas of use and may require basic reporting on the impact or use of the funds. A sponsored program typically obligates the University to a specific scope of work with specified deliverables, has specific financial requirements (financial reporting and/or the potential for an audit), and often requires that the funds be returned if not used as agreed upon with the sponsor.
For more information, see the University's official policy governing gifts vs. grants/sponsored projects, located here.
If you have more questions around this, feel free to contact Foundation Relations at email@example.com.