Foundations: Contemplating More Direct Charitable Activities

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Grant Thornton's 2017 State of NFP: FoundationsConversations about dedicating significant time and dollars to direct charitable activities have been occurring more frequently in the offices of private foundations. The principal reason is the desire to engage more fully to make a greater immediate impact on a public charity’s mission, rather than continuing in a more detached grant-making fashion. No longer are some foundation managers satisfied with simply making grants to public charities to fulfill mission objectives. Rather, they are seeking hands-on involvement in management and operations, bringing together the resources, funding and direction needed to accomplish the charitable mission.

The pace of this more active involvement is picking up, so much so that as direct charitable activities reach critical mass, many managers are considering significant changes to their foundation. Some are choosing to transfer the direct charitable activity to an existing charity, while others are considering spinning off the activity into a newly formed public charity. Some are taking a more radical route — transitioning their foundation to public charity status. The fact that many foundations have established a sunset date by which the foundation will wind down its operations has served as a catalyst for considering the possibilities to continue the foundation’s charitable mission beyond that date.

As you contemplate serving both the community and your foundation’s mission through direct charitable activities, read the full article for guidance in the choice of models and important tax and legal implications.

Visit the report overview for more articles: The State of the Not-for-Profit sector in 2017.

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