Well, I did not know that my articles on how to register a trust and a society will be able to help so many people out there. I am glad that the tendency of doing social work is growing in India. One of the most frequently asked questions on my NGO related articles is, “what is the difference between a foundation and a trust” or “what is the difference between a foundation and a society”. So many people have asked me this question that now I am forced to write a separate article to answer it.
First of all, if you also want to know the difference between a foundation and NGO, I would like to congratulate you for thinking about social work. As I explained in my articles, both a trust and a society are two forms of a non-profit or non-government organization in India. So, if you want to do social work and want to have a legal entity for this purpose, then you register either a trust or a society. You can also register a Section 25 company, but mostly people register trust or a society for charitable work.
Trust is a simpler entity. It is easier to register and run. Such an organization is primarily based on trust. Donors give you money “trusting” that you will make good use of it for the objectives stated in your trust deed. Trustees are not answerable to anyone except the Charity Commissioner and the relevant laws. If the Income Tax department is providing 80g and 12a exemptions —they can revoke it if trustees do not follow the rules and objectives mentioned in the trust deed.
Society, on the other hand is a more democratic organization. All the members of the governing body are also answerable to each other and they have to keep the donors and the Registrar of Societies informed about what decisions are being made by them. Societies have to keep records of the meetings of the governing body.
Difference between Foundation and Trust / Society / NGO
OK, now we know the basic information about trust and society. But what is a foundation? Well, “foundation” is just a word!
There is nothing like a foundation that you can register. Foundation is just a word that many NGOs use in there names. For example, some ABCXYZ Foundation could either be registered as a society or as a trust.
Foundation is an optional word —you don't have to use it in the name of your organization. If you want, you can use it —if you don't want, don't use it! Simple.
I hope now you will not get confused. Select the type of NGO from trust or society. In the name, you can use the word foundation, if you want.
I hope it was useful for you. Should you have any questions about this topic, feel free to ask me through comments section. I will try to best to assist you. Thank you for using TechWelkin!