Legal Considerations for Corporate Foundations

A Chapter in Mastering Foundation Law:
The Council on Foundations Compendium of Legal Resources

Legal Considerations for Corporate Foundations Cover

Many businesses set up related charitable organizations for the purpose of engaging in philanthropic endeavors supported by the company. Because the funding for these charitable organizations is derived primarily from contributions from the business, these entities typically are unable to qualify as public charities and instead qualify as private foundations. This chapter explores the special issues faced by corporate foundations as a result of their close relationship with their founding business.

This chapter is divided into five parts. Specifically:

Merits of a Separate Corporate Foundation

Part One explains the value of a separate corporate foundation as compared to direct corporate giving.

Formation of a Corporate Foundation

Part Two reviews the foundation formation process, legal entity status and related issues.

Funding the Corporate Foundation

Part Three discusses options and models for funding a corporate foundation.

Grantmaking and Scholarships by Corporate Foundations

Part Four examines grant making and scholarships by corporate foundations and the legal issues associated with these activities.

Transactions with or Involving the For-Profit Business

Part Five discusses legal issues associated with transactions between the corporation and the foundation and how the self-dealing rules apply.


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