Foundation is backing graduates (5)
I believe the answer is:
basis
'foundation' is the definition.
('basis' can be a synonym of 'foundation')
'is backing graduates' is the wordplay.
'backing' means one lot of letters go next to another.
'graduates' becomes 'bas' (I've seen this in other clues).
'is' put after 'bas' is 'BASIS'.
(Other definitions for basis that I've seen before include "Underlying support for a theory" , "Underlying support (for an idea)" , "Principle on which a theory is founded" , "First principle" , "Principal element" .)