There are three basic types of grantmaking foundations:
Independent Foundations: Independent foundations are the most common type of private foundation. They are generally founded by an individual, a family or a group of individuals. They may be operated by the donor or members of the donor’s family—a type often referred to as a family foundation—or by an independent board.
Corporate Foundations: Corporate foundations are created and funded by companies as separate legal entities, operated by a board of directors that is usually comprised of company officials. Corporations may establish private foundations with endowments, make periodic contributions from profits, or combine both methods to provide a foundation’s resources. Some companies operate in-house corporate giving programs, which unlike corporate foundations are under the full control of the company and are not required by law to follow the same IRS regulations. Many corporations maintain both a foundation and a corporate giving program.
Community/Public Foundations: Community and other public foundations are publicly supported foundations operated by, and for the benefit of, a specific community or geographic region. They receive their funds from a variety of individual donors, and provide a vehicle for donors to establish endowed funds without incurring the costs of starting a foundation. Community/public foundations are administered by a governing body or distribution committee representative of community interests.
There is also a type of foundation that does not generally make grants, called an operating foundation. The majority of an operating foundation’s funds are expended to operate its own charitable programs.