Foundation (charity)
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Foundations in civil law systems
The term foundation originates in civil law jurisdictions, where it is used to describe an distinct legal entity.
A foundation has legal personality, and is entered in a public registry like a company. Unlike a company, it has no shareholders. It holds assets in its own name for the purposes set out in its consitutive documents, and its administration and operation is carried out in accordance with contractual rather than fidcuciary principles. The foundation has a distinct patrimony independent of its founder.
Foundations are often set up for charitable purposes.
The foundation finds its source in institutions of medieval times when a patron would establish a foundation to endow a monastery or other religious institution in perpetuity.
Jersey is considering introducing foundations into its law: see "Foundations: Proposals for a new law" accessible http://www.mourant.com/_support/uploadedfiles/Foundations%20law%20consultation%20paper.pdf
(The object is to consitute institutions similar to a trust but avoiding the conceptual and legal problems which trusts present in civil law jurisdictions.) This consultation paper has a useful discussion of foundations generally.
\"Foundations\" in English law
In England, the word "foundation" is is sometimes used in the title of a charity, eg the British Heart Foundation, the Fairtrade Foundation. Apart from that the term is not generally used in English law, and (unike in civil law systems) the term has no precise meaning.
Foundations in US law
A foundation is a type of philanthropic organization set up by either individuals or institutions as a legal entity (either as a corporation or trust) with the purpose of distributing grants to support causes in line with the goals of the foundation. Wikimedia Foundation, parent organization of Wikipedia, is an example of a foundation.
In the United States the word "foundation" does not have the same legal restrictions as "incorporated" or "limited" therefore many foundations do not have the word foundation in their name and many organizations that one would not consider to be a foundation include the word foundation in their name. Also, whether an organization is a foundation or public charity is determined by tax law.
There are several types of foundations, including family foundations, corporate foundations and community foundations. Community foundations are public charities established in communities throughout the world (there are about 700 in the U.S.) to support community efforts. Frequently, these community foundations have both funds to be used at the discretion of the board of directors and other, specialized funds established by individuals, families, businesses, and nonprofit groups at these foundations into which they contribute a variety of assets (cash and stock being among the most popular). These assets are invested and grow over time. While there are many different kinds of funds that can be established, among the most popular are donor advised funds. These enable those who established them to contribute assets into the funds at any time, and then they can recommend that grants be made from the fund to qualified nonprofit groups in any amount and at any time in the future--anywhere in the world. Community foundations also work with people to help them implement charitable giving as part of their estate plans--e.g., through a bequest.
See also
- Charitable organisation
- Charitable trust
- Ford Foundation
- Foundations in Canada
- List of wealthiest foundations
- Malian Foundation
- Offshore foundation
- Program evaluation
- Rockefeller Foundation
- Tom Joyner Foundation
- Wikimedia Foundation
Further reading
- Joan Roelofs, Foundations and Public Policy: The Mask of Pluralism, State University of New York Press, 2003
External links
- [UK Charity Commission.]
- [Foundation Source, Inc.]
- [American Endowment Foundation.]
- [The Foundation Center], a Clearinghouse of Information on the approximately 25,000 U.S. Foundations
- [Council on Foundations]
- [U.S. Corporate Foundations]
- [Canada Revenue Agency - Annual Registered Charity Information Returns]
- [Charity Navigator] - quantitive rankings of US-based charities/foundations
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