While Canada has experienced a long and successful history of encouraging social participation and community activity through its grantmaking foundation sector, this article argues that Canada’s historic and present-day regulatory restrictions have limited the extent to which its foundation sector has been allowed to innovate and flourish. To exemplify the types of tractable regulatory schemes that have allowed grantmaking foundation sectors in comparative contexts to prosper, the evolution of the grantmaking foundation sectors in Sweden, Germany, and the Netherlands is examined within the context of social origins theory. One important contribution of this article is to compare their regulatory frameworks to the Canadian context. It concludes with lessons learned for the Canadian grantmaking foundation sector and for public officials to consider.