In today’s economy, it’s hard to find the money to get into a good school or bring new and innovative technology into classrooms. If you’ve found financial success in the world, giving back by allowing others to achieve the best education possible is one great way to spend your money.
But creating an education foundation isn’t as easy as throwing a bunch of money into an account and giving it away. It takes a lot of effort, planning, and commitment to fundraising in order to make an education foundation successful.
If you’re interested in starting your own education foundation, keep reading. We’re going to break down the basics for you so you can start planning your own education foundation today.
Table of Contents
What is a Foundation
First, let’s take a look at what a foundation is. A foundation is a not-for-profit organization or trust that gives money away for charitable reasons, like science, religion, and education.
There are two main kinds of foundations: grantmaking public charities and private foundations.
A private foundation gets its money from a single source, like a family or a corporation. A grantmaking public charity, or a public foundation, obtains funding through a number of different sources.
Be Sure You Can Commit
Before you take on the responsibility of a foundation, you need to be positive you can take on the commitment. It’s not as simple as just giving people money and calling it a day.
Running a foundation, like this foundation, is like running another business, and you need to treat it the same way. You’ll spend a lot of time ensuring that everything is running smoothly, so ensure that you have a passion for this kind of work.
Spring for an Attorney and Make Bylaws
Getting an attorney who is experienced in foundations and trusts is an invaluable resource for any foundation. Attorneys can help you make decisions about your organization.
Will you run a charitable trust or a 501(c)3? An attorney can help you decide.
In addition to hiring an attorney to help you make basic decisions, you should also make your own bylaws.
These laws should include the board selection process, how your foundation will make decisions, what meetings you need to have, and what you’ll do when a conflict-of-interest pops up.
There need to be rules for everyone in your foundation to follow in order to ensure that it runs as smoothly as possible,
Decide Who Will Get Your Money
Once you’ve set up the internal infrastructure, you can set criteria for who the recipients of your funding will be.
If you set up your foundation in such a way that anyone can receive a grant without meeting a certain set of criteria, your foundation will be without purpose. You want to decide what you’re passionate about, what you want to see in the world and build your criteria around that.
Some of the criteria you should keep in mind are the kinds of programs you would like to support and what your application timeline will look like.
In addition to the application process, you may want to require the recipients of your grant to provide a follow-up report so you can show where your money went and how it helped someone get a good education.
Find Your Board Members
It might be tempting to immediately fill your board with family and friends, before you make that call, consider a few other options.
When you fill your board with people who are in your circle, your fundraising circle isn’t as large. You’ll have a lot of overlap and you won’t cover as broad of a spectrum as you would if you had other people there to help.
Instead of just hiring friends and family, considering hiring people who have experience in fundraising and social service projects. These people are bound to have connections with a lot of folks who are willing to give money to a good cause.
Develop Fundraising Plans
While we’re on the topic of fundraising, it’s also important that you develop detailed plans as to how you’re going to bring in money for your foundation.
Treat this like any other business. Set up solid, measurable goals for yourself for each quarter. Lay out how you’re going to achieve those goals in detail, and then take the steps to make it happen.
Unless you’ve got the cash in your own financials to fund this foundation, you’re going to need a lot of money. Start making plans now and get your foundation’s name out there so people can start thinking about it.
The Conflict of Interest
The biggest mistake an education foundation can make is using the funds for purposes other than helping those in need. Your foundation should never use its money to advance other businesses, selling products, or delivering services.
Also, it’s a good idea to not get involved in politics. Otherwise, your tax-exempt status could be revoked.
Good Fund Management
Another mistake many foundations make is when the owner of the foundation considers the foundation and their business as one entity. However, you have to make sure that you separate your business funds from your foundation funds, don’t let the two cross.
Get different employer ID numbers for your foundation and your business. They’re two different things and should be treated that way.
If you would like to donate to your corporation from your business funds, be specific about it and document everything. And never, ever use the foundation’s funds to fund your business.
Creating a Successful Education Foundation
Creating an education foundation is a great way to give back to the community and see the young people of today thrive. When you can provide the funds for an education, you’re ensuring a brighter future for everyone, not just the person or group you helped to fund.
If you’re looking for a way to make a positive change in the lives of many young people, starting an education foundation is a great way to do it.
For more great ideas for how to give back, check out this article next.