3 ms·

Isn't "Foundation" a word that is usually for non-profits? I understood the different between "Charity" and "Foundation" just to be about "Public" vs "Private"

Isn't "Foundation" a word that is usually for non-profits? I understood the different between "Charity" and "Foundation" just to be about "Public" vs "Private" organization, but both of them being non-profits. Am I misunderstanding what "Foundation" means here?

AlbertCory 3y ago
I think I could start the Evil Foundation and as long as I don't file for 501(c)(3) status, I'm still for-profit.
- shkkmo 3y ago
  The foundation here is a 501(c)(3) non profit. However it is not a public charity, which is a sub classification that comes with stricter rules and higher donation tax write-off limits. People tend to assume all 501(c)(3)/nonproft and "public charity" are synonymous, but they aren't and that can make discussions like this confusing.
  - nulbyte 3y ago
    > However it is not a public charity, which is a sub classification that comes with stricter rules and higher donation tax write-off limits. It sounds like you mean public charities have stricter rules. I find the opposite to be true. There are additional rules and reporting requirements that apply only to private foundations because of the limited funding and tight control of such organizations by a close-knit group of people.
    - shkkmo 3y ago
      Private foundation is the default status for a 501(c)(3), you have to do extra work to qualify as a public non-profit. > https://www.irs.gov/charities-non-profits/eo-operational-requirements-private-foundations-and-public-charities https://www.irs.gov/charities-non-profits/eo-operational-req... The rules are different, so which you view as more restrictive dependa on your perspective. In this case, the context is discussion of this claim: > I thought the tax-benefits of a non-profit were supposed to be tied to some governance requirements and operating in pursuit of some mission other than profit Thr greater tax benefits of public charities are indeed tied to governance requirements (specifically rules that restrict the board makeup of public charities) and mission alignment.
      - AlbertCory 3y ago
        thanks. What are these "greater tax benefits of public charities"? They both qualify for deduction of contributions.
        AlbertCory 3y ago
        I could look this up if I were inclined. I imagine, though, that a public charity is eligible to receive government grants or contracts.
        alexarnesen 3y ago
        Contributions to charities can reduce taxable income up to 50% (of amount) for the donor. For foundations this figure maxes out at 30%.

AlbertCory 3y ago

I think I could start the Evil Foundation and as long as I don't file for 501(c)(3) status, I'm still for-profit.

shkkmo 3y ago
The foundation here is a 501(c)(3) non profit. However it is not a public charity, which is a sub classification that comes with stricter rules and higher donation tax write-off limits. People tend to assume all 501(c)(3)/nonproft and "public charity" are synonymous, but they aren't and that can make discussions like this confusing.
- nulbyte 3y ago
  > However it is not a public charity, which is a sub classification that comes with stricter rules and higher donation tax write-off limits. It sounds like you mean public charities have stricter rules. I find the opposite to be true. There are additional rules and reporting requirements that apply only to private foundations because of the limited funding and tight control of such organizations by a close-knit group of people.
  - shkkmo 3y ago
    Private foundation is the default status for a 501(c)(3), you have to do extra work to qualify as a public non-profit. > https://www.irs.gov/charities-non-profits/eo-operational-requirements-private-foundations-and-public-charities https://www.irs.gov/charities-non-profits/eo-operational-req... The rules are different, so which you view as more restrictive dependa on your perspective. In this case, the context is discussion of this claim: > I thought the tax-benefits of a non-profit were supposed to be tied to some governance requirements and operating in pursuit of some mission other than profit Thr greater tax benefits of public charities are indeed tied to governance requirements (specifically rules that restrict the board makeup of public charities) and mission alignment.
    - AlbertCory 3y ago
      thanks. What are these "greater tax benefits of public charities"? They both qualify for deduction of contributions.
      - AlbertCory 3y ago
        I could look this up if I were inclined. I imagine, though, that a public charity is eligible to receive government grants or contracts.
      - alexarnesen 3y ago
        Contributions to charities can reduce taxable income up to 50% (of amount) for the donor. For foundations this figure maxes out at 30%.