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Home Foundations Basics

Why Consider a Private Charitable Foundation?


Circle of HandsThe “trust” concept blossomed in England in the Middle Ages when landowners were building wealth, and some of them bore children who would not be able to manage the assets they would eventually inherit.  Such children who were physically, mentally or emotionally handicapped (remember there were no public nor government services at that time) needed to be provided for as well.  So a wealthy friend would volunteer, that upon the passing of the parents, to oversee the care of the children as well as to accept responsibility for stewardship of the family wealth in the interests of lifetime protection for such offspring.  Thus the “third party” concept developed, to responsibly, honorably and ethically steward the assets, have total control without actual ownership, afnd monitor the children as well.  This is the historical basis of a “Trust”.

In the late 1800s, as the more wealthy banking interests quietly targeted Americans for an income tax, some such families chose to develop a way to protect their assets and avoid the coming taxes.  They also did some public charitable contributing in order to appear to benefit society.  They reasoned that if a “third party” owned the assets, but the family members retained complete control, they could escape liability concerns and still have the same benefits as if they actually possessed those assets.  Remember David Rockefeller’s statement:  “Own nothing.  Control everything.”  Thus the Private Charitable Foundation in the form of a Private Trust came into being.

This has now morphed into what we have today:  a 501(c)(3) entity which is overseen by the Exempt Organizations section of the IRS.   There are several types of 501s, and this is just one small but powerful type in that grouping.  Anyone can create such a foundation {there is no minimum asset level required), protect all the donated assets, give back at a very minimum level (could be zero) or whatever one desires, invest free of capital gains taxes, escape estate and gift taxes, and turn what would be uncontrolled tax dollars into credible charity dollars.  A private operating foundation runs programs that make a difference and thus has no requirement to give away funds at all.

With the arrival of the new, massive prosperity funds available for immediate humanitarian purposes (relief of suffering, poverty, homelessness, abuse of any kind [children, the elderly, pets and animals, the environment], illnesses and disabilities, etc.), the foundation concept becomes once again a powerful tool of those who choose to be 1) honorable and honest in their financial and personal dealings with others, 2) to be fully accountable for the monies and their disposition, and 3) to separate their personal assets from the charitable funds under their control but not their ownership.  The foundation becomes the funds’ owner, and all is put toward charitable purposes.

A private charitable foundation is the perfect, most flexible entity form with the greatest integrity and clarity, that serves all the needs of those with funds and/or with projects to support and administer.  This unique and unparalleled structure is now available to you!


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