Ever dreamed of establishing your own foundation to change the world? You do not have to be a Bill Gates or Warren Buffet when you want to give something back. There are more than 1.5 million foundations that have been set up in the US alone and each of them is different and has its own distinct purpose.
Before setting up your foundation, you need to go through a 10 question check list and make sure that you are ready for the long-term commitment.
10 questions you need to ask yourself before setting up a foundation
What will be the main purpose of your foundation?
Do you want to fund charitable projects locally, nationally or internationally?
Are you comfortable in managing and being accountable for the funds raised by your foundation?
Do you want to work in collaboration with others or have your friends and family members involved?
Where will you set up your foundation?
How will you raise money to start up and maintain the foundation?
Do you want to provide any tax incentives for donors giving cash or securities?
Do you want to work with grantees?
Is this what you want to do for the next 10 years?
- Do you have the necessary time to set up and sustain the foundation?
If you believe that setting up a foundation is the right course for you, here are just a few points to consider before you start.
Mission, Vision, Values
Defining these three key words is an essential first step in setting up a successful foundation. They are the essence of your cause and define the scope, place and purpose of your organisation in the world. Well positioned foundations with clear objectives will find it much easier to inspire people to get engaged with their activities.
Purpose of your organisation
You should have a clear view on what you want to achieve within a defined timeline. Have you already thought of what the main activity of your organisation will be, who your target audience is and who will actually benefit from your charity?
Seek out financial and business advice on how much money and other resources your charity would need as well as calculate start up and ongoing costs. Have a look at financial statements of similar foundations.
You need to have a clear view on how you will raise money for your foundation. For example, will you be charging membership fees, organising events, holding public auctions or applying for grants?
Understanding the importance of having the correct legal structure
Your decision needs to take into account the following: size of your charity, who will run it, will you employ staff or work with contractors and will the trustees be personally liable for what the charity does? The choice of the country where you will set up your foundation can be an important strategic question. Local laws can make it easier or harder to set up and maintain a foundation and you may also have to consider where your potential donors are located and if they would like to benefit from tax benefits associated with charitable giving.
Resilience and Patience are a must
Continuity of your foundation is key and this requires resilience and patience. Setting up a charity foundation is similar to establishing a business. You are expected to invest your time, passion and money and it takes effort and determination until you receive the satisfaction of knowing that your foundation is having a positive impact in society.
Source: Starting a foundation. A guide for philanthropists, 2nd edition. Philanthropic Foundations of Canada.