What is the Difference Between Charity and Foundation?

The main difference between a charity and a foundation lies in the manner in which they acquire funds and the nature of their operations. Here are the key differences:

• Charity: A charity is an organization that is not driven by profit but by dedication to a given cause, targeting all income beyond what it takes to run the organization towards that cause. Charities can be public or private, and they continually solicit charitable donations from the community. Public charities use their money to carry out direct activities, such as providing services or programs to the community.
• Foundation: A foundation is a type of charitable organization that is typically created by a single benefactor, usually an individual or a business, and the funds are derived from that single source. Foundations make grants to individuals or other charities, but they do not usually contribute to other private foundations. Like charities, foundations are dedicated to a specific cause or set of causes and may have spending requirements or restrictions.

In summary, the main difference between a charity and a foundation is the manner in which they raise funds and the nature of their operations. While both are dedicated to specific causes or sets of causes, charities continually solicit charitable donations from the community and carry out direct activities, while foundations are generally funded by a single, large endowment of funds and make grants to individuals or other charities.

Comparative Table: Charity vs Foundation

Here is a table comparing the differences between a charity and a foundation:

Please note that there are public charities (Charity) and private foundations (Foundation) as two types of 501(c)(3) organizations. The table highlights the key differences between them.