Chapter SeventeenCorporate Foundations1

  1. § 17.1 Corporate Foundation Overview
  2. § 17.2 Reasons for Establishment of a Corporate Foundation
  3. § 17.3 Private Inurement Doctrine
  4. § 17.4 Disqualified Persons Rules
  5. § 17.5 Self-Dealing Rules
    1. (a) Payment of Compensation and Reimbursements
    2. (b) Sharing of Facilities
    3. (c) Provision of Tangible Benefits
    4. (d) Grant-Making
    5. (e) Incidental and Tenuous Benefits
    6. (f) Corporate Reorganizations and Stock Transfers
  6. § 17.6 Other Private Foundations Rules
    1. (a) Mandatory Payout Rules
    2. (b) Excess Business Holdings Rules
    3. (c) Jeopardizing Investments Rules
    4. (d) Taxable Expenditures Rules
    5. (e) Economic Returns

Tax-exempt charitable organizations that are affiliated with for-profit corporations, and usually controlled by them, are almost always private foundations (generically, corporate foundations). This private foundation status arises, in large part, because the related for-profit corporation typically is the sole funder of the corporate foundation.

§ 17.1 Corporate Foundation Overview

Among the four features of a conventional private foundation is the characteristic that it is funded from one source.2 Because the typical foundation related to a for-profit business is financially supported only by that business entity, the corporate foundation usually is a private foundation. It is possible for a charitable organization that is controlled by a for-profit entity to be a public charity—most likely, a donative-type publicly supported organization3—but these ...

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