Fairfield-based Foundation Source is one of the nation”™s largest providers of comprehensive support services to private foundations. The company, which celebrated its 20th anniversary, offers management solutions for those seeking to pursue philanthropic endeavors, offers multiple services including setting up a foundation, creating its strategic vision mission and providing an end-to-end solution that covers a wide variety of aspects ranging from researching charities seeking grants to legal input and tax compliance expertise.
In this edition of Suite Talk, Business Journal Senior Enterprise Editor Phil Hall discusses Foundation Source”™s operations with Sunil Garga, a tech industry entrepreneur who joined the company last February as president and CEO.
How many foundations does your company work with?
We are crossing the 2,000-mark. We have foundations of all sizes, from the small $100,000 foundations to a foundation in excess of $4 billion. We have many foundations, which are between $1 million and $50 million.
In the United States, there are about 100,000 private foundations, and almost two-thirds of them are at $1 million. And interestingly, they give away as many grants a year as a big foundation, except the big foundations are giving bigger-sized checks. But the smaller foundations make a huge difference. We serve every client who wants to start a foundation, regardless of size.
Where do you get your clients? Do you look for them, or do they find you?
I wish they were finding us. A large part of our business either comes from client referrals and from our partners who are wealth advisors, CPAs, attorneys and accounting firms, because these are these individuals or companies who are helping people that their estate planning and financial planning. For a lot of the high-net-worth individuals, charitable and philanthropy giving becomes an important aspect of the wealth planning. And in that wealth planning, many times it is recommended to them that private foundations should fit their needs.
What is the main reason for creating a private foundation?
Private foundations provide incredible tax breaks. That’s one of the reasons why people prefer them ”” you put money in a private foundation and you get a deduction of your adjusted gross income. We saw a lot of foundations getting started in November and December, as the year was coming to an end. People are saying, “I want to start a foundation because I’ll also get the tax benefit.”
How does Foundation Source work with its clients in terms of grant making?
We support the entire work process. For example, say that you want to support children”™s STEM education. There are 2 million charities in the United States that are approved by the IRS, so our team and our tools will help you research charities that are approved by the IRS that are geared more towards supporting STEM education. And if have a very special cause and you want to set up a scholarship grant, we will help you do that. We’ll go and do the research to find the right recipients, but we don’t make any recommendations.
Now, let’s say you find two or three that you like after we helped you do the research. You would say, “I want to send a $1,000 check to this charity.” You put in a request with us, we will send them the check with the grant letter coming from you.
The company”™s work sounds very complex. How many people do you have working for you?
We have about just under 200 people and the average tenure of our one of our colleagues is six years. People in this company work for less money they can get outside, but they are so energized and engaged about the idea that it’s a purpose-driven company.
You came to the company nearly one year ago after a career in technology. What attracted you to Foundation Source?
It’s the idea behind it. Our clients are on track to give away $1 billion in charitable philanthropy, and that’s something to wake up to. I was an entrepreneur all my life ”” I had a couple of companies in the data analytics, business marketing and media consulting industries, and I wanted to do something that was more purpose driven.
How has the Covid-19 pandemic impacted philanthropy?
Our clients gave away more money than they have in the past, and they were doing what we call “general purpose” grants. So instead of doing more specific grants that were targeted, in 2021 we had almost 45% of our grants as general purpose grants that were giving it without restrictions or requirements that it has to go to a specific cause.
Are there foundations that you would have declined to work with, for whatever reason?
Not all money is good money, and because every foundation and every family are different, we go through a discovery phase. And we want to make sure that that family is a good fit for the services we can provide.
