Foundations serve the purpose of providing grants to organizations so they can achieve their goals. Here is what ehow.com says you need to do in order to start a foundation:
1) Decide if the foundation will be a private foundation or a public one. Difference is a private foundation is funded through one source, normally an individual, family or corporation while a public foundation is funded through multiple sources. These sources can be anyone, even another foundation, but they must continue to be diverse to retain their diverse status.
2) Outline the goal of the foundation when your start planning. Is the foundation going to be temporary until the funding run out, or is the goal to last forever. Decide how much time and effort it will take to administer foundation and figure out the tax consequences for different scenarios that you are considering.
3) Create the by-laws. Certain legal documents are also required to be filed with the IRS as well as applying for an Employer Identification Number for tax purposes. Finally state regulations must be followed and proper documents filed with the state where the foundation will reside.
4) Consider the expenses the foundation can afford to pay or if they wish to pay any at all when you start your foundation. Options for administrative staff include board of directors, consultants, attorneys all of whom can be either volunteer or paid.
5) Consult an attorney for guidance on the initial setup when you start a foundation. They can assure that the foundation is in compliance with both the IRS, and state regulations. Even if you decide to not keep an attorney on staff full time, the initial investment in one is well worth it to avoid hassles down the road.
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