The Z. Smith Reynolds Foundation was established in 1936 as a memorial to the youngest son of the founder of R.J. Reynolds Tobacco Company. In that year the brother and two sisters of Z. Smith Reynolds - R.J. Reynolds, Jr., Mary Reynolds Babcock, and Nancy Susan Reynolds Bagley - provided that their inheritance from his estate would go to the establishment of a trust for "charitable works in the State of North Carolina." One of the initial trustees of the Foundation was Z. Smith Reynolds' uncle, William Neal Reynolds, who at his death in 1951 created a trust that now provides a portion of the Foundation's annual income.
In its history, the Foundation, as the beneficiary of the income from the Zachary Smith Reynolds Trust and the W. N. Reynolds Trust, has made grants to organizations in all of North Carolina's 100 counties.
In 1946 the Foundation entered into a contract with Wake Forest University to move the college from the town of Wake Forest in Wake County to Winston-Salem. The Foundation has continued to have a special relationship with Wake Forest University over the years and provides annual support to it.
The Foundation makes grants only to nonprofit, tax-exempt, charitable organizations and institutions that are exempt under Section 501(c)(3) of the Internal Revenue Code or to governmental units. No grants are made to individuals for any purpose. Organizations that operate both within and outside of the State of North Carolina may be eligible for consideration for programs operating in North Carolina. However, this Foundation is restricted to making grants supporting projects in North Carolina with the purpose of benefiting residents of North Carolina.The Foundation actively seeks to promote access, equity, and inclusiveness; and to discourage discrimination based on race, ethnicity, gender, age, socioeconomic status, and other factors that deny the essential humanity of all people. The Foundation has the conviction that inclusiveness benefits everyone and is not only compatible with, but also promotes, excellence. The Z. Smith Reynolds Foundation's grantsmaking policies reflect the belief that organizational performance is greatly enhanced when people with different backgrounds and perspectives are engaged in an organization's activities and decision-making process.