The Foundation was created by the former members of The Charlotte Cushman Club. The Club was formed in 1907 by Lydia Elliot Morris and her friends in response to a need for respectable, inexpensive, safe and convenient lodgings for actresses appearing in Philadelphia theaters. Many famous actors and actresses visited the Club for post curtain parties, which helped to defray the expenses of maintaining the facility and its collections. The Club housed the Eleanor Westcott Library of rare theater memorabilia, photographs, books and antique furnishings. Members created the Cushman Award for Lifetime Achievement in the Theater, which was presented to luminaries such as Richard Burton, Zoe Caldwell, Carol Channing, Helen Hayes, Katherine Hepburn, Robert Morse and Ginger Rogers.
The 21st Century brought many changes to the theater in the Greater Philadelphia Area, including the rise of a number of non-profit theaters and performing arts groups. It was decided to sell the clubhouse and to donate the collections to various schools and organizations. Proceeds from the sale were added to the existing endowment to fund the Foundation. In 1999, the Cushman Foundation Board Room and Exhibit were established at the University of the Arts.