An Introduction to Trusts and Foundations

To discuss the benefits of setting up a Foundation or Trust for your family wealth, you can contact one of our partners today

Foundations and Trusts - what are they?

Foundations and trusts are charities with private, sustainable income. Trusts and foundations, in turn, make grants to help individuals and charities achieve their goals.

From a fundraiser’s point of view, the terms “trust” or “foundation” can often be used interchangeably. Both do the same thing, but the difference lies in the constitution and legal status.

Foundations and trusts independently decide, and are not influenced by political matters or trends. They decide what they want to accomplish and how they can benefit the community at a local or national scale.

The types of funding they offer

Foundations and trusts offer many types of funding, including:

Kickstart funding: To get a project started

Revenue funding: To cover running expenses and salaries

Capital financing: To pay for equipment or building costs

Project funding: To pay for items in a project budget. Sometimes, this may include a contribution towards overhead and management time.

Long-term funding: To provide funding for a number of years

Trusts of any size often offer small grants. These grants are easier to apply for and respond to than standard grants. A small grant is a great way to get to know the trust and build a working relationship before you apply for a larger grant.

What are the various types of foundations and trusts?

Foundations and trusts can take many forms, with different funding priorities. Some foundations are focused on a specific type of organisation, while others focus on specific themes. Others have a broader remit. While some trusts only give within a particular area, others can give nationwide. It’s important to understand the differences between trusts and foundations before you spend time researching them.

Family trusts

Family trusts can be established by family members to distribute personal family donations.

Trusts for companies

Companies’ profit can be used to fund corporate foundations that donate money to charities. However, such donations often have a greater value than grants. Either directly or through foundations, companies may offer pro bono assistance or expertise, volunteer hours, or any other kind of support. They may form a long-term partnership or alliance with charities in some cases.

Private Trusts

Private trusts and foundations are funded by private income. This is usually generated through investments. The interest is then donated to charity organisations in the form of a grant.

Funds for Livery companies

Livery companies were initially established to protect trade interests, some of which in fact date back to medieval times. While some livery funds provide grants or bursaries to individuals and organisations working in the same trade, others have expanded giving to include grants to other charitable organisations.

Public Appeal Trusts

Although most trusts receive their income from investments, there are some exceptions that get money from the public. Children In Need and Comic Relief, household names, raise millions of pounds each year from the public. This money is used to fund good causes.

Community foundations

A community foundation is a public charity that focuses on supporting one area. It facilitates and pools donations to support local nonprofits and address community needs. If you would like to discuss the benefits of setting up a Foundation or Trust for your family wealth, please contact one of our partners today.

Click to download: