It was founded by Tun Mustapha Harun and manages a diverse portfolio of resources and issues.

[1] The Kota Kinabalu-based think-tank was allowed to be established by 1966 Sabah State Legislative Assembly Enactment No.

The government gave the foundation 3,300 acres (1,300 ha) of land and a grant of 1 million ringgit to fund the start-up of the organisation.

When Sabah participated for the first time in a national election in 1969, opposition candidates managed to file nominations in only six of the sixteen constituencies, the rest being disqualified for one reason or another.

[4] Although the foundation was no longer a private entity, the state government, led by the Berjaya political party, did not have the control that they expected because financial investments continued to be controlled by Innoprise, an entity and within the foundation responsible for managing its investments.

[4] In 1994 a Price Waterhouse audit revealed that Sabah Foundation accounts were missing more than $1 billion, evidence of accusations of corruption.

Its objective is to "undertake strategic initiatives to function as a primary information resource center - contributing towards establishing a knowledge-economic society.

The foundation likened to Indonesian President Suharto's administration and "heavily criticised for its partisan nature" assuming that it "was a device for imposing mainstream Malay culture onto Dayak (and in particular Iban) youth".

[10] 14 Borneo pygmy elephants were found dead in a concession area of Sabah Foundation within two weeks in 2013, the cause likely being poisoning.