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.