Trust vs. Foundation: What's the Difference?

Edited by Huma Saeed || By Sawaira Riaz || Updated on October 2, 2023

A trust is a legal entity where property is held by one party for the benefit of another, while a foundation is a legal entity with its own purposed assets to achieve a specified goal, often charitable.

Key Differences

Trusts are legal arrangements allowing trustees to hold assets for beneficiaries, generally focusing on estate planning, wealth management, or asset protection. In contrast, foundations are legal entities typically established for charitable, educational, or philanthropic purposes, using its assets to achieve specific goals and is often self-funded.

Oct 01, 2023

Trusts operate on the basis of a trust deed, which outlines the terms and conditions for managing the trust’s assets and distributing benefits, enabling a flexible structure. Foundations, however, are usually governed by a board and are more rigid and formal in structure, focusing on long-term goals and having a clear mission and objective.

Oct 01, 2023

In terms of transparency, trusts often afford a degree of privacy, especially in managing and transferring wealth, as the details of the trust arrangement may not be public. Conversely, foundations are subject to more public scrutiny and regulations due to their charitable nature, requiring clear documentation of activities and finances.

Oct 01, 2023

Financial control in a trust is in the hands of the trustees who manage the assets for the benefit of the beneficiaries, allowing the trust to distribute income. Foundations, on the other hand, are generally non-profit entities, using their income to pursue their mission and often re-investing it to sustain their activities.

Oct 01, 2023

Summarizing, while trusts are flexible entities focusing on holding assets for others, foundations are mission-driven organizations with their own assets working towards achieving specified objectives, usually of a charitable nature.

Oct 01, 2023

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Comparison Chart

Purpose

Manages assets for beneficiaries.

Achieves specified, often charitable goals.

Oct 01, 2023

Structure

Flexible, governed by a trust deed.

Rigid, managed by a board.

Oct 01, 2023

Transparency

Often private.

Subject to public scrutiny and regulation.

Oct 01, 2023

Financial Control

Trustees control and distribute income.

Income is reinvested to sustain mission.

Oct 01, 2023

Duration

Can be temporary or perpetual.

Typically long-term or perpetual.

Oct 01, 2023

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Trust and Foundation Definitions

Trust

Reliance on something in the future; hope

We have trust that the future will be better.

Sep 17, 2023

Foundation

An entity established to accomplish a charitable, educational, or philanthropic goal.

The foundation contributes to various social causes to uplift the underprivileged sections of society.

Sep 21, 2023

Trust

A fiduciary relationship involving a trustee managing assets for beneficiaries.

The trust was established to manage the inheritance for the minor beneficiaries until they reach a certain age.

Sep 21, 2023

Foundation

A legal structure with its assets dedicated to fulfilling its mission.

The arts foundation promotes cultural endeavors and supports artists and their projects.

Sep 21, 2023

Trust

A legal entity created to hold assets with specified conditions.

The family set up a trust to protect their estate and ensure the continuity of their wealth.

Sep 21, 2023

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Foundation

A legal organization with a specified objective, using its assets for a defined purpose.

The health foundation is dedicated to supporting medical research and promoting healthcare awareness.

Sep 21, 2023

Trust

A relationship wherein one party holds property for the benefit of another.

The trust ensures that the beneficiary receives the income generated from the assets held by the trustee.

Sep 21, 2023

Foundation

A non-profit institution, focusing on achieving long-term missions.

The educational foundation strives to enhance learning opportunities for students from diverse backgrounds.

Sep 21, 2023

Trust

Firm belief in the integrity, ability, or character of a person or thing; confidence or reliance

Trying to gain our clients' trust.

Taking it on trust that our friend is telling the truth.

Sep 17, 2023

Foundation

An organization established with endowed funds for a specific cause.

The environmental foundation uses its funds to advocate for conservation and sustainable practices.

Sep 21, 2023

Trust

The condition and resulting obligation of having confidence placed in one

Violated a public trust.

Sep 17, 2023

Foundation

The act of founding, especially the establishment of an institution with provisions for future maintenance.

Sep 17, 2023

Trust

One in which confidence is placed.

Sep 17, 2023

Foundation

(Architecture) A wall or other structure, as of concrete or masonry, usually extending below ground level and forming the base upon which a building rests.

Sep 17, 2023

Trust

Custody; care

Left her papers in my trust during her illness.

Sep 17, 2023

Foundation

Something that gives rise to or supports something else.

Sep 17, 2023

Trust

Something committed into the care of another; a charge

Violated a public trust.

Sep 17, 2023

Foundation

The act of founding, fixing, establishing, or beginning to erect.

The foundation of his institute has been wrought with difficulty.

Sep 17, 2023

Trust

Reliance on the intention and ability of a purchaser to pay in the future; credit

Bought the supplies on trust from a local dealer.

Sep 17, 2023

Foundation

That upon which anything is founded; that on which anything stands, and by which it is supported; the lowest and supporting layer of a superstructure; underbuilding.

Sep 17, 2023

Trust

A legal relationship in which one party holds a title to property while another party has the entitlement to the beneficial use of that property.

Sep 17, 2023

Foundation

(figurative) The result of the work to begin something; that which stabilizes and allows an enterprise or system to develop.

Sep 17, 2023

Trust

The confidence reposed in a trustee when giving the trustee legal title to property to administer for another, together with the trustee's obligation regarding that property and the beneficiary.

Sep 17, 2023

Foundation

(card games) In solitaire or patience games, one of the piles of cards that the player attempts to build, usually holding all cards of a suit in ascending order.

Sep 17, 2023

Trust

The property so held.

Sep 17, 2023

Foundation

(architecture) The lowest and supporting part or member of a wall, including the base course and footing courses; in a frame house, the whole substructure of masonry.

The foundations of this construction have been laid out.

Sep 17, 2023

Trust

An institution or organization directed by trustees

A charitable trust.

Sep 17, 2023

Foundation

A donation or legacy appropriated to support a charitable institution, and constituting a permanent fund; endowment.

Sep 17, 2023

Trust

A combination of firms or corporations for the purpose of reducing competition and controlling prices throughout a business or industry.

Sep 17, 2023

Foundation

That which is founded, or established by endowment; an endowed institution or charity.

The Wikimedia Foundation, Inc. is the parent organization of the Wiktionary collaborative project.

Sep 17, 2023

Trust

To have or place confidence in; depend on

Only trusted his friends.

Did not trust the strength of the thin rope.

Could not be trusted to oversee so much money.

Sep 17, 2023

Foundation

(cosmetics) Cosmetic cream roughly skin-colored, designed to make the face appear uniform in color and texture.

Sep 17, 2023

Trust

To have confidence in allowing (someone) to use, know, or look after something

Can I trust you with a secret?.

Sep 17, 2023

Foundation

A basis for social bodies or intellectual disciplines.

Sep 17, 2023

Trust

To expect with assurance; assume

I trust that you will be on time.

Sep 17, 2023

Foundation

The act of founding, fixing, establishing, or beginning to erect.

Sep 17, 2023

Trust

To give credence to; believe

I trust what you say.

Sep 17, 2023

Foundation

That upon which anything is founded; that on which anything stands, and by which it is supported; the lowest and supporting layer of a superstructure; groundwork; basis.

Behold, I lay in Zion, for a foundation, a stone . . . a precious corner stone, a sure foundation.

The foundation of a free common wealth.

Sep 17, 2023

Trust

To place in the care of another person or in a situation deemed safe; entrust

"the unfortunate souls who trusted their retirement savings to the stock" (Bill Barnhart).

Sep 17, 2023

Foundation

A donation or legacy appropriated to support a charitable institution, and constituting a permanent fund; endowment.

He was entered on the foundation of Westminster.

Sep 17, 2023

Trust

To extend credit to.

Sep 17, 2023

Foundation

That which is founded, or established by endowment; an endowed institution or charity; as, the Ford Foundation.

Against the canon laws of our foundation.

Sep 17, 2023

Trust

To have or place reliance; depend

We can only trust in our guide's knowledge of the terrain.

Sep 17, 2023

Foundation

The basis on which something is grounded;

There is little foundation for his objections

Sep 17, 2023

Trust

To be confident; hope.

Sep 17, 2023

Foundation

An institution supported by an endowment

Sep 17, 2023

Trust

Confidence in or reliance on some person or quality.

He needs to regain her trust if he is ever going to win her back.

To lose trust in someone

Build up trust

A relationship built on mutual trust

Sep 17, 2023

Foundation

The fundamental assumptions from which something is begun or developed or calculated or explained;

The whole argument rested on a basis of conjecture

Sep 17, 2023

Trust

Dependence upon something in the future; hope.

Sep 17, 2023

Foundation

Lowest support of a structure;

It was built on a base of solid rock

He stood at the foot of the tower

Sep 17, 2023

Trust

Confidence in the future payment for goods or services supplied; credit.

I was out of cash, but the landlady let me have it on trust.

Sep 17, 2023

Foundation

Education or instruction in the fundamentals of a field of knowledge;

He lacks the foundation necessary for advanced study

A good grounding in mathematics

Sep 17, 2023

Trust

That which is committed or entrusted; something received in confidence; a charge.

Sep 17, 2023

Foundation

A woman's undergarment worn to give shape to the contours of the body

Sep 17, 2023

Trust

That upon which confidence is reposed; ground of reliance; hope.

Sep 17, 2023

Foundation

The act of starting something for the first time; introducing something new;

She looked forward to her initiation as an adult

The foundation of a new scientific society

He regards the fork as a modern introduction

Sep 17, 2023

Trust

(rare) Trustworthiness, reliability.

Sep 17, 2023

Trust

The condition or obligation of one to whom anything is confided; responsible charge or office.

Sep 17, 2023

Trust

(legal) The confidence vested in a person who has legal ownership of a property to manage for the benefit of another.

I put the house into my sister's trust.

Sep 17, 2023

Trust

(legal) An arrangement whereby property or money is given to be held by a third party (a trustee), on the basis that it will be managed for the benefit of, or eventually transferred to, a stated beneficiary; for example, money to be given to a child when he or she reaches adulthood.

Sep 17, 2023

Trust

A group of businessmen or traders organised for mutual benefit to produce and distribute specific commodities or services, and managed by a central body of trustees.

Sep 17, 2023

Trust

(computing) Affirmation of the access rights of a user of a computer system.

Sep 17, 2023

Trust

(transitive) To place confidence in, to rely on, to confide in.

We cannot trust anyone who deceives us.

Sep 17, 2023

Trust

To have faith in; to rely on for continuing support or aid.

Sep 17, 2023

Trust

(transitive) To give credence to; to believe; to credit.

Sep 17, 2023

Trust

(transitive) To hope confidently; to believe (usually with a phrase or infinitive clause as the object)

I trust you have cleaned your room?

Sep 17, 2023

Trust

(transitive) to show confidence in a person by entrusting them with something.

Sep 17, 2023

Trust

(transitive) To commit, as to one's care; to entrust.

Sep 17, 2023

Trust

(transitive) To give credit to; to sell to upon credit, or in confidence of future payment.

Merchants and manufacturers trust their customers annually with goods.

Sep 17, 2023

Trust

To rely on (something), as though having trust (on it).

To trust to luck

Having lost the book, he had to trust to his memory for further details.

Sep 17, 2023

Trust

To risk; to venture confidently.

Sep 17, 2023

Trust

(intransitive) To have trust; to be credulous; to be won to confidence; to confide.

Sep 17, 2023

Trust

To sell or deliver anything in reliance upon a promise of payment; to give credit.

Sep 17, 2023

Trust

(obsolete) Secure, safe.

Sep 17, 2023

Trust

(obsolete) Faithful, dependable.

Sep 17, 2023

Trust

(legal) of or relating to a trust.

Sep 17, 2023

Trust

Assured resting of the mind on the integrity, veracity, justice, friendship, or other sound principle, of another person; confidence; reliance; reliance.

Most take things upon trust.

Sep 17, 2023

Trust

Credit given; especially, delivery of property or merchandise in reliance upon future payment; exchange without immediate receipt of an equivalent; as, to sell or buy goods on trust.

Sep 17, 2023

Trust

Assured anticipation; dependence upon something future or contingent, as if present or actual; hope; belief.

His trust was with the Eternal to be deemedEqual in strength.

Sep 17, 2023

Trust

That which is committed or intrusted to one; something received in confidence; charge; deposit.

Sep 17, 2023

Trust

The condition or obligation of one to whom anything is confided; responsible charge or office.

[I] serve him truly that will put me in trust.

Reward them well, if they observe their trust.

Sep 17, 2023

Trust

That upon which confidence is reposed; ground of reliance; hope.

O Lord God, thou art my trust from my youth.

Sep 17, 2023

Trust

An estate devised or granted in confidence that the devisee or grantee shall convey it, or dispose of the profits, at the will, or for the benefit, of another; an estate held for the use of another; a confidence respecting property reposed in one person, who is termed the trustee, for the benefit of another, who is called the cestui que trust.

Sep 17, 2023

Trust

An equitable right or interest in property distinct from the legal ownership thereof; a use (as it existed before the Statute of Uses); also, a property interest held by one person for the benefit of another. Trusts are active, or special, express, implied, constructive, etc. In a passive trust the trustee simply has title to the trust property, while its control and management are in the beneficiary.

Sep 17, 2023

Trust

A business organization or combination consisting of a number of firms or corporations operating, and often united, under an agreement creating a trust (in sense 1), esp. one formed mainly for the purpose of regulating the supply and price of commodities, etc.; often, opprobriously, a combination formed for the purpose of controlling or monopolizing a trade, industry, or business, by doing acts in restraint or trade; as, a sugar trust. A trust may take the form of a corporation or of a body of persons or corporations acting together by mutual arrangement, as under a contract or a so-called gentlemen's agreement. When it consists of corporations it may be effected by putting a majority of their stock either in the hands of a board of trustees (whence the name trust for the combination) or by transferring a majority to a holding company. The advantages of a trust are partly due to the economies made possible in carrying on a large business, as well as the doing away with competition. In the United States severe statutes against trusts have been passed by the Federal government and in many States, with elaborate statutory definitions.

Sep 17, 2023

Trust

Held in trust; as, trust property; trustmoney.

Sep 17, 2023

Trust

To place confidence in; to rely on, to confide, or repose faith, in; as, we can not trust those who have deceived us.

I will never trust his word after.

He that trusts every one without reserve will at last be deceived.

Sep 17, 2023

Trust

To give credence to; to believe; to credit.

Trust me, you look well.

Sep 17, 2023

Trust

To hope confidently; to believe; - usually with a phrase or infinitive clause as the object.

I trust to come unto you, and speak face to face.

We trustwe have a good conscience.

Sep 17, 2023

Trust

To show confidence in a person by intrusting (him) with something.

Whom, with your power and fortune, sir, you trust,Now to suspect is vain.

Sep 17, 2023

Trust

To commit, as to one's care; to intrust.

Merchants were not willing to trust precious cargoes to any custody but that of a man-of-war.

Sep 17, 2023

Trust

To give credit to; to sell to upon credit, or in confidence of future payment; as, merchants and manufacturers trust their customers annually with goods.

Sep 17, 2023

Trust

To risk; to venture confidently.

[Beguiled] by theeto trust thee from my side.

Sep 17, 2023

Trust

To have trust; to be credulous; to be won to confidence; to confide.

More to know could not be more to trust.

Sep 17, 2023

Trust

To be confident, as of something future; to hope.

I will trust and not be afraid.

Sep 17, 2023

Trust

To sell or deliver anything in reliance upon a promise of payment; to give credit.

It is happier sometimes to be cheated than not to trust.

Her widening streets on new foundations trust.

They trusted unto the liers in wait.

Sep 17, 2023

Trust

Something (as property) held by one party (the trustee) for the benefit of another (the beneficiary);

He is the beneficiary of a generous trust set up by his father

Sep 17, 2023

Trust

Certainty based on past experience;

He wrote the paper with considerable reliance on the work of other scientists

He put more trust in his own two legs than in the gun

Sep 17, 2023

Trust

The trait of trusting; of believing in the honesty and reliability of others;

The experience destroyed his trust and personal dignity

Sep 17, 2023

Trust

A consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service;

They set up the trust in the hope of gaining a monopoly

Sep 17, 2023

Trust

Complete confidence in a person or plan etc;

He cherished the faith of a good woman

The doctor-patient relationship is based on trust

Sep 17, 2023

Trust

A trustful relationship;

He took me into his confidence

He betrayed their trust

Sep 17, 2023

Trust

Have confidence or faith in;

We can trust in God

Rely on your friends

Bank on your good education

I swear by my grandmother's recipes

Sep 17, 2023

Trust

Allow without fear

Sep 17, 2023

Trust

Be confident about something;

I believe that he will come back from the war

Sep 17, 2023

Trust

Expect and wish;

I trust you will behave better from now on

I hope she understands that she cannot expect a raise

Sep 17, 2023

Trust

Confer a trust upon;

The messenger was entrusted with the general's secret

I commit my soul to God

Sep 17, 2023

Trust

Extend credit to

Sep 17, 2023

Trust

A financial arrangement providing a means of asset protection and wealth management.

He placed his assets in a trust to safeguard them from any unforeseen financial circumstances.

Sep 21, 2023

Trust

A structure for segregating assets for specified purposes.

The charitable trust was created to fund educational initiatives for underprivileged children.

Sep 21, 2023

FAQs

Can a trust fund charitable activities?

Yes, charitable trusts can be established to fund charitable activities.

Oct 01, 2023

Can a foundation have beneficiaries?

Foundations don’t have beneficiaries in the way trusts do; they serve their mission or purpose.

Oct 01, 2023

Do foundations have trustees?

Foundations are usually governed by a board, not trustees.

Oct 01, 2023

Can a trust be established for any purpose?

Trusts can be established for various purposes, but they must be legal and clear.

Oct 01, 2023

Can foundations be temporary?

Foundations are typically established with a long-term or perpetual perspective.

Oct 01, 2023

Are all trusts and foundations non-profit?

Foundations are typically non-profit, while trusts can be either non-profit or for-profit.

Oct 01, 2023

Can trusts have a specific duration?

Trusts can have a specified duration or exist in perpetuity, depending on the trust deed.

Oct 01, 2023

Is a trust deed mandatory for trusts?

Typically, a trust deed is essential for outlining the terms and conditions of the trust.

Oct 01, 2023

Are foundations subject to audits?

Foundations are usually subject to audits due to their charitable nature and public scrutiny.

Oct 01, 2023

Are foundations and trusts taxed differently?

The taxation of foundations and trusts depends on their structure, purpose, and activities, and they may be taxed differently.

Oct 01, 2023

Can trusts and foundations be international?

Both trusts and foundations can operate internationally, depending on their establishment and objectives.

Oct 01, 2023

Who controls the assets in a trust?

Trustees control the assets in a trust, managing them for the beneficiaries.

Oct 01, 2023

Can a trust operate as a foundation?

While trusts and foundations have distinct structures and purposes, some trusts can operate similarly to foundations in fulfilling charitable objectives.

Oct 01, 2023

Can a foundation be dissolved?

Foundations can be dissolved, typically requiring a legal process and distribution of remaining assets in line with the foundation’s purpose.

Oct 01, 2023

Can a foundation own assets?

Foundations own assets which are dedicated to fulfilling their mission.

Oct 01, 2023

Church vs. Cathedral

About Author

Written by

Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.

Edited by

Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.