Although they are often linked with the founding corporation, corporate foundations are a separate legal organization subject to the same rules and regulations as other private foundations. Profit-making businesses, usually large corporations, establish corporate foundations to enable them to support projects in communities where they operate manufacturing plants, retail outlets, and other direct business. They are most interested in helping organizations in the communities where their employees live, though sometimes they expand grantmaking into communities where their customers live as well.

Corporate foundations have a board of trustees usually composed of current and retired corporate leaders. Staff often includes an executive director who reviews grants and makes recommendations to the board.

A corporate foundation is different from a corporate-giving program. The former has an endowment through which it earns income and makes grants. A corporate-giving program, on the other hand, makes grants of money or products based on its annual earnings. The gifts, therefore, fluctuate from year to year and may not be available at all during lean years.