Back to Basics: Foundations Versus Nonprofit Organizations 

Foundations vs Nonprofits

Back to Basics: Foundations Versus Nonprofit Organizations 

If you’re not privy to the nonprofit world, you may hear Foundations and Nonprofit and think they are synonymous. In actuality there are a number of differences between the two and as Nonprofit and Foundation Staffing Professionals we are here to answer all of your questions.  

According to Foundation List, a nonprofit is “meant to describe a nonprofit organization not operating primarily to make a profit. Instead it an organization whose mission focuses on furthering a social cause or a shared goal or mission.” A nonprofit organization is one where the excess money it makes fuels the organization’s mission. Employees of a nonprofit still get a salary (excluding the volunteers), but they don’t benefit from run-over profits if the organization turns out to be successful. The money goes toward what that organization set out to do. 

 A foundation is an organization that did not qualify as a public charity. They are very similar to nonprofits, except money for a foundation usually comes from a family or a corporate entity, whereas nonprofit money often comes from their revenues. 

It’s technically possible to donate money to private foundations, but many foundations won’t accept it. As an alternative, they’ll take the money they started out with, invest it, and then distribute the money made from those investments. Foundations will also donate these funds to other nonprofits in the form of gifts or grants. Moreover, there are two types of foundations:  

  • A private nonoperating foundation grants money to other charitable organizations. These foundations often do not directly perform any charitable programs or services other than grant-making. 
  • A private operating foundation distributes funds to its own programs that exist for charitable purposes. 

 

As you can see, there are many differences between a foundation and nonprofit, but they both are integral to serve the greater needs of communities. To learn more about working with foundations and nonprofits, contact the nonprofit recruitment experts at Scion Nonprofit.