Since the economic collapse of 2008, charity groups and non-profit organizations have been more challenged than ever to provide support for those folks needing some help. But with more and more non-profit organizations competing for fewer charity dollars from the community, making a decision about where to provide support and donations can be very difficult. One way of sorting through this maze and deciding which fundraisers and charity drives to participate in is by understanding how these foundations operate. If you understand some of the basic terminology used in philanthropy you'll be better equipped to decide which foundations you want to help fund.
Charitable Trust - This term usually refers to a sum of money that is used for philanthropic purposes, but is governed by a board of trustees. The trustees decide how the profits from the trust are doled out and insure that the principle is protected.
Grants - Grants are utilized by almost every philanthropy in your community. Grants usually come from Government agencies or private donor and sometimes have very strict limitations. Money from a grant to provide low cost housing for homeless families with children, for example, could not be used to house single men.
Non-Profit Organization - These organizations are governed by some pretty complicated rules, but the basics are pretty simple. A non-profit foundation is basically a business that gives its profits to charity. They may earn money from fundraisers like a charity run, or by running a retail outlet like a thrift store. Anything beyond basic operating expenses is used to fund that groups' mission, whether it's helping the homeless, or providing after school tutoring to low income children.
A non-profit organization is any business that operates under a very small profit margin. Generally speaking, these foundations exist for the sole purpose of using any profits earned for the sake of promoting the business - similar to a fundraiser. Any profits made are reinvested back into the business. Some of these are open for the sake of charity, while others thrive on philanthropy. Some of these even exist for the sake of the community, promoting a specific cause or program.
Many of these non-profit foundations and organizations seek donations from the general public to help keep the business afloat, pay small salaries, and continue to promote their mission. People love to donate to non-profit organizations for the tax write-off benefits they can receive from the Federal (and in some cases, state) government. However, most people see tax write-offs as secondary to the concept of supporting the cause or mission of the charity. Fundraisers and community events such as luncheons, bake sales, garage sales or even community memberships all help to promote the non-profit organization. Where does the money go? Some of these businesses fund grants to low income families on welfare. Others provide free meals to school children or the homeless.
Housing assistance funding to help support low income families and households is another common program offered, as is employment assistance and counseling. Debt management programs are recent non-profit phenomena, helping folks overcome credit card debt or mortgage defaults. One of the most common charities is for medical research, such as for cancer, diabetes, or muscular dystrophy. Philanthropy in the community and our society is always a great benefit for someone in need, and many organizations exist to help folks out when they need it the most.