Guidelines for Supporting Organizations

Under appropriate circumstances, a "supporting organization" may be formed in connection with the San Diego Foundation. The San Diego Foundation welcomes the opportunity to work with donors who, after consultation with their legal counsel and tax and financial advisors, desire to support the activities and goals of The San Diego Foundation through the formation of a supporting organization.

The San Diego Foundation has adopted the following guidelines in order to establish and maintain a productive and rewarding relationship between The San Diego Foundation and its supporting organizations, and to facilitate the efficient administration and operation of its supporting organizations.

1. Articles of Incorporation
Typically, a supporting organization is formed through the incorporation of a California nonprofit public benefit corporation. The Articles of Incorporation for the supporting organization should provide that (i) the supporting organization operates for the support and benefit of The San Diego Foundation and (ii) on dissolution, the assets of the supporting organization will be paid to The San Diego Foundation, provided it is a qualified tax exempt organization at that time. Appropriate form language is available. The San Diego Foundation should be the only supported organization of the supporting organization.

2. Bylaws
The Bylaws of the supporting organization should provide that either (i) The San Diego Foundation is the sole member of the supporting organization or (ii) the supporting organization is a nonmembership organization for which The San Diego Foundation appoints a majority of the board to trustees. The Chief Executive Officer of The San Diego Foundation, or his or her designee, should always be on the board of trustees of the supporting organization. The bylaws should require that the supporting organization should submit to The San Diego Foundation (I) quarterly financial reports and (ii) an annual operating budget. Because The San Diego Foundation operates on a June 30 fiscal year, it is recommended that the supporting organization adopt a June 30 fiscal end year. Finally, in accordance with federal income tax law, the board of trustees of the supporting organization cannot be controlled by the donor and/or the donor's family. Appropriate form language is available.

3. Administration
If desired, The San Diego Foundation can provide services to assist the supporting organization with (I) overall administration, (ii) corporate governance and/or (iii) making grants. The responsibility for investment of the supporting organization's assets is vested in its board of trustees, which may engage such advisors as it deems appropriate.