What is a charitable trust or foundation?

A charitable trust or foundation is typically established by a wealthy individual, family, or corporation. Sometimes the trust is established during the donor’s lifetime, while in other cases it is created upon the event of the donor’s death. The foundation serves as a way to control otherwise taxable income by donating it to one or more nonprofit organizations, or by using the funds to directly participate in philanthropic projects.

There are more than 70,000 charitable foundations in the United States today, ranging widely in scope and subject matter. The wealthiest foundation in the world, established by the Microsoft tycoon and his wife, is the Bill and Melinda Gates Foundation, with a $35.1 billion endowment largely funded by Gates and business tycoon Warren Buffet.  The Gates Foundation does not solicit donations from private individuals, and focuses its efforts on giving grants to nonprofits working in the areas of global health, poverty & development, education & information, and assorted special projects.

Many other notable individuals have created foundations that are focused on funding innovative projects and research, including former presidents Bill Clinton and Jimmy Carter. Such foundations’ grants may range in size from several hundred to as much as several million dollars, and are typically tied to specific focus areas. Raise money for these foundations and other foundations.

Creating a charitable trust can be a wonderful way to build a lasting legacy for your family, and to make an ongoing commitment to philanthropy. If you’re interested in seeing what’s involved in creating your own family foundation, learn more here .