All of that money, what could you possibly do with it? How about establishing a charitable foundation?
A charitable foundation is a tax-exempt organization. That means that your organization is exempt from income taxation. Charitable foundations direct a fund of investment assets and from time to time dispense portions of these assets or the income that is made by these assets to charitable causes and organizations. These distributions are referred to as being grants. Charitable foundations can be divided into three separate categories. The distinct differences among these categories are because of their sources of funds and the direct focus of their grants.
A community foundation is a public foundation that manages funds from private sources. These funds are particularly managed and allocated for local needs. The two major purposes of a community foundation is to gain funds from private sources and construct a collection of wealth for local charitable purposes. Its second purpose is to allocate and issue these funds for public needs. The second category of charitable foundations are independent/family foundations. These foundations are considered to be the most common type of private foundations. Some of the foundations classified under this category have donations and funds that are acquired from a specific source. These charitable foundations do not rely on public support and do not serve a purpose to raise funds or seek grants. The largest amount of their budget is usually applied to grants to other charitable organizations that provide support and activity to the public. The last type of charitable foundation is a corporate foundation. As another type of private foundation, corporate foundations gain their funds through a commercial company. Corporate foundations are linked to the corporation that is providing the funding.
Charitable foundations can help you to follow your philanthropic concerns and make a contribution to the public. There are many advantages that can be gained through creating a charitable foundation. As previously mentioned, the tax benefits are astounding. Donation tax credit and a reduction of tax liability are the bonuses of establishing a charitable foundation. A sense of contentment in your altruistic efforts will be a large reward in establishing a charitable foundation. Also, your personal participation in creating your charitable foundation will allow you to exercise control, manage funds, and generate strategies that will benefit your organization. Organizing a charitable foundation also allows you to reach markets of individuals, corporations, communities, charities, etc. that could not have possibly been reached before. Using a charitable foundation as your link to other sources can provide you with a vast market.
Examples of exceptionally profitable and philanthropic foundations include the Ford Foundation, The Carnegie Corporation of New York, The Rockefeller Foundation, The Fannie Mae Foundation, etc. These foundations remain outstanding for their promotion of action in philanthropy. Whether your desire is to improve health care, seek innovation in technology, target the education of today’s youth, or focus on community problems, a charitable foundation can significantly help you fulfill your desires and wishes.
By Danielle Spanner