Charitable Foundation Requirements : A Collective Body With A Legal EntityOrganisations are formed by people for two purposes. An organisation may be formed for profit making business purpose, while others may be non-profit organisations. Within these non-profit organisations, some are specifically charitable trusts, involved in charitable activities. The people forming these kinds of organisations are called the trustees. These trusts either hold a fund from a donor, who has specifically created this trust, or collects funds from donors, and other social bodies in the world, for the purpose for which the trust has been formed. Here we discuss charitable foundation requirements. "Charitable Foundation" refers to a distinct legal body. The organisation is ordinarily introduced in a public registry as a company, but has a major difference. It has got no shareholders. There may be some members who would be participating in the meetings of the foundation, and might be even be voting. But that is not all about this organisation. The foundation would normally have assets in its own name, and would be working to fulfill the purposes for which it has been originally founded. The task is carried out in accordance with the contracts framed for such foundation. The guiding principles for the charitable foundation are not purely financial, they are mostly contractual. There are many renowned foundations like the Ford Foundation, the Nobel Foundation who contribute a lot towards charity. Therefore, a foundation can also be set up for charitable purposes. A charitable foundation is defined as, "A charitable foundation is a legal categorisation of nonprofit organisations that either donate funds and support to other organisations, or provide the sole source of funding for their own activities". The concept of charitable foundation found its foothold in the society in the medieval ages, when patrons used to set up foundation to help monasteries or such other religious groups. A philanthropic or charitable organisation, which is set up by an individual, or a collective body having a legal entity, and has the sole objective of distributing financial support, sponsoring a specific activity or activities, may be called a charitable foundation. In countries like the United States, the term "Foundation" has assumed an altogether different meaning. Many charitable foundations there do not have the name foundation incorporated with their names. Ordinarily, the characteristic of a foundation is determined on the basis of the tax code in operation. Mostly, the community foundations are those who work as public charities. There are numerous such charitable foundations all over the world. There are around seven hundred charitable foundations in United States alone. Funds dealt with by such foundations include, funds that could be utilised at the discretion of the Board of Directors. They also deal with specialised funds established by individuals, families, commercial houses, and nonprofit groups into which they contribute a number of assets The principal purpose of a charitable foundation is funding other unrelated organisations involved in charitable works or research and inventions. These works may be scientific, educational, religious, cultural, social, or any such thing. However, there are certain foundations that are called "spend down" foundations. This means that these organisations close down after a specific period of time has elapsed, and its limited fund is exhausted with grant making. Two great personalities who pioneered the concept of charitable foundation were John D. Rockfeller and Andrew Carnegie. Carnegie devoted his earnings in gifts to build libraries and museums in several places. Rockfeller also invested a major part of his fortune to create the Rockfeller Foundation. This Foundation has become the standing specimen grant making charitable foundation. |