Consumers Union Nonprofit Conversions
Corporate Structures Nonprofit Health Inc. Conversions 101
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Community Responsive Foundations

The solution most commonly selected to preserve nonprofit assets consistent with the charitable trust and cy pres doctrines is to create a new foundation that will continue the charitable purposes of the former nonprofit. Proceeds of conversion transactions are often used to establish a new nonprofit organized as a grantmaking foundation though in some conversions, rather than form a new foundation, assets are transferred to an established community foundation. Most conversions currently result in the creation of new foundations.

Advocates must be involved in choices and decisions about the mission, governance, and structure of the entity that will receive the proceeds from the conversion. Regulator and consumer involvement can strongly influence how effectively the assets are used and whether the foundation will meet the highest standards for community engagement, accountability, and philanthropic practice. Unlike foundations created from private wealth or corporate generosity, conversion foundations are unique, built by communities from assets dedicated to the broader public’s benefit. Therefore, foundations receiving a nonprofit’s assets must represent and reflect the broader community and its health needs.

Building and Maintaining Strong Foundations: (PDF) This handbook explains everything you need to know about how community members and consumer advocates can get involved in the creation and ongoing operation of new health foundations in order to address the health needs of their locality, state, or region. These are the topics that are discussed in-depth in the handbook.

  • From Nonprofit Health Organization to Foundation: The Basics
  • Planning for New Health Foundation: Getting the Public in on the Ground Floor
  • Forming New Foundation: Issues and Standards
  • Maintaining Health Foundation: Ensuring Community Responsiveness
  • Questions to Ask about Foundations resulting from Nonprofit Conversions

Model Articles of Incorporation (PDF)
Model Bylaws (PDF)

Advancing Accountability: (PDF) This report describes and includes a practice-based tool, the Grantmaking Accountability Template devised by Consumers Union to help foster the twin goals of improved internal monitoring and public partnering between foundations and the communities they serve.

Grantmakers in Healthlink (GIH) is a nonprofit, educational organization dedicated to helping foundations and corporate giving programs improve the nation's health.