By the everyday usage definition of the phrase, all computer
systems are reasoning systems in that they all automate some type of
logic or decision. In typical use in the Information Technology
field however, the phrase is usually reserved for systems that perform
more complex kinds of reasoning. For example, not for systems that do
fairly straightforward types of reasoning such as calculating a sales
tax or customer discount but making logical inferences about a medical
diagnosis or mathematical theorem. Reasoning systems come in two modes:
interactive and batch processing. Interactive systems interface with the
user to ask clarifying questions or otherwise allow the user to guide
the reasoning process. Batch systems take in all the available
information at once and generate the best answer possible without user
feedback or guidance.
The
first reasoning systems were theorem provers, systems that represent
axioms and statements in First Order Logic and then use rules of logic
such as modus ponens to infer new statements. Another early type of reasoning system were general problem solvers. These were systems such as the General Problem Solver designed by Newell and Simon.
General problem solvers attempted to provide a generic planning engine
that could represent and solve structured problems. They worked by
decomposing problems into smaller more manageable sub-problems, solving
each sub-problem and assembling the partial answers into one final
answer. Another example general problem solver was the SOAR family of systems.
In practice these theorem provers and general problem solvers
were seldom useful for practical applications and required specialized
users with knowledge of logic to utilize. The first practical
application of automated reasoning were expert systems.
Expert systems focused on much more well defined domains than general
problem solving such as medical diagnosis or analyzing faults in an
aircraft. Expert systems also focused on more limited implementations of
logic. Rather than attempting to implement the full range of logical
expressions they typically focused on modus-ponens implemented via
IF-THEN rules. Focusing on a specific domain and allowing only a
restricted subset of logic improved the performance of such systems so
that they were practical for use in the real world and not merely as
research demonstrations as most previous automated reasoning systems had
been. The engine used for automated reasoning in expert systems were
typically called inference engines. Those used for more general logical inferencing are typically called theorem provers.
With the rise in popularity of expert systems many new types of
automated reasoning were applied to diverse problems in government and
industry. Some such as case-based reasoning were off shoots of expert
systems research. Others such as constraint satisfaction algorithms were
also influenced by fields such as decision technology and linear
programming. Also, a completely different approach, one not based on
symbolic reasoning but on a connectionist model has also been extremely
productive. This latter type of automated reasoning is especially well
suited to pattern matching and signal detection types of problems such
as text searching and face matching.
Use of logic
The term reasoning system can be used to apply to just about any kind of sophisticated decision support system
as illustrated by the specific areas described below. However, the most
common use of the term reasoning system implies the computer
representation of logic. Various implementations demonstrate
significant variation in terms of systems of logic and formality. Most reasoning systems implement variations of propositional and symbolic (predicate) logic. These variations may be mathematically precise representations of formal logic systems (e.g., FOL), or extended and hybrid versions of those systems (e.g., Courteous logic). Reasoning systems may explicitly implement additional logic types (e.g., modal, deontic, temporal
logics). However, many reasoning systems implement imprecise and
semi-formal approximations to recognised logic systems. These systems
typically support a variety of procedural and semi-declarative
techniques in order to model different reasoning strategies. They
emphasise pragmatism over formality and may depend on custom extensions
and attachments in order to solve real-world problems.
Many reasoning systems provide capabilities for reasoning under uncertainty. This is important when building situatedreasoning agents
which must deal with uncertain representations of the world. There are
several common approaches to handling uncertainty. These include the
use of certainty factors, probabilistic methods such as Bayesian inference or Dempster–Shafer theory, multi-valued ('fuzzy') logic and various connectionist approaches.
Types of reasoning system
This
section provides a non-exhaustive and informal categorisation of common
types of reasoning system. These categories are not absolute. They
overlap to a significant degree and share a number of techniques,
methods and algorithms.
Theorem provers use automated reasoning techniques to determine proofs
of mathematical theorems. They may also be used to verify existing
proofs. In addition to academic use, typical applications of theorem
provers include verification of the correctness of integrated circuits,
software programs, engineering designs, etc.
Logic programs
Logic programs (LPs) are software programs written using programming languages whose primitives and expressions
provide direct representations of constructs drawn from mathematical
logic. An example of a general-purpose logic programming language is Prolog.
LPs represent the direct application of logic programming to solve
problems. Logic programming is characterised by highly declarative
approaches based on formal logic, and has wide application across many
disciplines.
Rule engines
Rule engines
represent conditional logic as discrete rules. Rule sets can be managed
and applied separately to other functionality. They have wide
applicability across many domains. Many rule engines implement
reasoning capabilities. A common approach is to implement production systems to support forward or backward chaining. Each rule ('production') binds a conjunction of predicate clauses to a list of executable actions.
At run-time, the rule engine matches productions against facts
and executes ('fires') the associated action list for each match. If
those actions remove or modify any facts, or assert new facts, the
engine immediately re-computes the set of matches. Rule engines are
widely used to model and apply business rules, to control decision-making in automated processes and to enforce business and technical policies.
Deductive classifier
Deductive classifiers arose slightly later than rule-based systems and were a component of a new type of artificial intelligence knowledge representation tool known as frame languages.
A frame language describes the problem domain as a set of classes,
subclasses, and relations among the classes. It is similar to the object-oriented model. Unlike object-oriented models however, frame languages have a formal semantics based on first order logic.
They utilize this semantics to provide input to the deductive
classifier. The classifier in turn can analyze a given model (known as
an ontology)
and determine if the various relations described in the model are
consistent. If the ontology is not consistent the classifier will
highlight the declarations that are inconsistent. If the ontology is
consistent the classifier can then do further reasoning and draw
additional conclusions about the relations of the objects in the
ontology.
For example, it may determine that an object is actually a
subclass or instance of additional classes as those described by the
user. Classifiers are an important technology in analyzing the
ontologies used to describe models in the Semantic web.
Machine learning systems
Machine learning systems evolve their behavior over time based on experience.
This may involve reasoning over observed events or example data
provided for training purposes. For example, machine learning systems
may use inductive reasoning to generate hypotheses
for observed facts. Learning systems search for generalised rules or
functions that yield results in line with observations and then use
these generalisations to control future behavior.
Case-based reasoning systems
Case-based reasoning
(CBR) systems provide solutions to problems by analysing similarities
to other problems for which known solutions already exist. Case-based
reasoning uses the top (superficial) levels of similarity; namely, the
object, feature, and value criteria. This differs case-based reasoning
from analogical
reasoning in that analogical reasoning uses only the "deep" similarity
criterion i.e. relationship or even relationships of relationships, and
need not find similarity on the shallower levels. This difference makes
case-based reasoning applicable only among cases of the same domain
because similar objects, features, and/or values must be in the same
domain, while the "deep" similarity criterion of "relationships" makes
analogical reasoning applicable cross-domains where only the
relationships ae similar between the cases. CBR systems are commonly
used in customer/technical support and call centre scenarios and have applications in industrial manufacture, agriculture, medicine, law and many other areas.
Dispersed knowledge in economics is the notion that no single agent has information as to all of the factors which influence prices and production throughout the system. The term has been both expanded upon and popularized by American economist Thomas Sowell.
Overview
Each
agent in a market for assets, goods, or services possesses incomplete
knowledge as to most of the factors which affect prices in that market.
For example, no agent has full information as to other agents' budgets,
preferences, resources or technologies, not to mention their plans for
the future and numerous other factors which affect prices in those
markets.
Market prices are the result of price discovery,
in which each agent participating in the market makes use of its
current knowledge and plans to decide on the prices and quantities at
which it chooses to transact. The resulting prices and quantities of
transactions may be said to reflect the current state of knowledge of
the agents currently in the market, even though no single agent commands
information as to the entire set of such knowledge.
Some economists believe that market transactions provide the
basis for a society to benefit from the knowledge that is dispersed
among its constituent agents. For example, in his Principles of Political Economy, John Stuart Mill states that one of the justifications for a laissez faire
government policy is his belief that self-interested individuals
throughout the economy, acting independently, can make better use of
dispersed knowledge than could the best possible government agency.
Key characteristics
Friedrich Hayek claimed that "dispersed knowledge is essentially
dispersed, and cannot possibly be gathered together and conveyed to an
authority charged with the task of deliberately creating order".
Today, the best and most comprehensive book on dispersed knowledge is Knowledge and Decisions by Thomas Sowell, which Hayek called "the best book on general economics in many a year."
Phenomena
"Dispersed
knowledge will give rise to genuine uncertainty, which necessitates the
contractual structure that we recognize as a firm."
"Dispersion of knowledge and genuine uncertainty contribute to the
heterogeneity of expectations that must exist in order for one or more
individuals to exploit the potential of the contractual structure of the
firm."
"Dispersion of knowledge, genuine uncertainty, and heterogeneous
expectations give rise to the nexus of the enterprising individual and
the opportunity to discover, create, and exploit new markets."
Drivers
Large
numbers: Large numbers have a great impact on actions in terms of two
aspects. On the one hand, there will be an increase in time and other
resource requirements. On the other hand, actors with bounded cognitive
resources will lose overview.
Asymmetries: Asymmetries have a two-sides effect. Firstly,
asymmetries enable more possibilities regarding learning and competence
development. Secondly, asymmetries "increase differences between
interpretative frameworks and the knowledge and competence profile of
the different actors and thus make integration more difficult".
Uncertainty: Uncertainty is defined to be one of the drivers of dispersed knowledge which can give rise to management problems.
Uncertainty
Dispersed knowledge will give rise to uncertainty which will lead to different kinds of results.
1. Dispersed knowledge causes different opinions and sources in cooperate organizations and it brings creativity.
Richard LeFauve highlights the advantages of organizational structure in companies:
"Before if we had a tough decision to make, we would have two
or three different perspectives with strong support of all three. In a
traditional organization the bossman decides after he’s heard all three
alternatives. At Saturn we take time to work it out, and what generally
happens is that you end up with a fourth answer which none of the
portions had in the first place. but one that all three portions of the
organization fully support (AutoWeeR, Oct. 8, 1990. p. 20)."
Companies are supposed to think highly of the dispersed knowledge and make adjustments to meet demands.
2. Dispersed knowledge causes management problems at the same time.
Tsoukas stated:
"A firm’s knowledge is distributed, not only in a
computational sense . . . or in Hayek’s (1945, p. 521) sense that the
factual knowledge of the particular circumstances of time and place
cannot be surveyed as a whole. But, more radically, a firm’s knowledge
is distributed in the sense that it is inherently indeterminate: nobody
knows in advance what that knowledge is or need be. Firms are faced with
radical uncertainty: they do not, they cannot, know what they need to
know."
Strategies
There are several strategies targeting at the problems caused by dispersed knowledge.
First of all, replacing knowledge by getting access to knowledge can be one of the strategies.
What's more, the capability to complete incomplete knowledge can deal with knowledge gaps created by the dispersed knowledge.
In addition, making a design of institutions with reasonable coordination mechanisms can be regarded as the third strategy.
Besides, resolving organization units into smaller ones should be taken into consideration.
Last but not least, providing more data to decision maker will be helpful for making a correct decision.
GoFundMe is an American for-profitcrowdfunding platform that allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses.
From 2010 to the beginning of 2020, over $9 billion has been raised on
the platform, with contributions from over 120 million donors.
History
The
company was founded in May 2010 by Brad Damphousse and Andrew
Ballester. Both had previously founded Paygr, which is a website
dedicated to allowing members to sell their services to the public.
Damphousse and Ballester originally created the website under the name
"CreateAFund" in 2008 but later changed the name to GoFundMe after
making numerous upgrades to the features of the website. The site was built off of PayPal's API. GoFundMe was founded in San Diego, California.
In March 2017, GoFundMe became the biggest crowdfunding platform,
responsible for raising over $3 billion since its debut in 2010. The
company receives over $140 million in donations per month and made 2016
$100 million in revenue. In June 2015, it was announced that Damphousse and Ballester had agreed to sell a majority stake in GoFundMe to Accel Partners and Technology Crossover Ventures.
Damphousse and Ballester stepped down from the day-to-day oversight of
the company. The deal valued GoFundMe at around $600 million. In January 2017, GoFundMe acquired CrowdRise. GoFundMe's CEO is Tim Cadogan. Ballester remains on the board of directors and holds an undisclosed stake in the company.
Business model
During this process, members can describe their fundraising cause and the amount they hope to raise, and upload photos or video.
Once the website is created, GoFundMe allows users to share their
project with people through integrated social network links (Facebook,
Twitter, etc.) and email. People can then donate to a user's cause
through the website using a debit card or credit card and track the funding. Those who donate can also leave comments on the website. The person raising funds is not charged. Payment processors collect 2.9% and $0.30 from each GoFundMe transaction.
GoFundMe is unique to crowdfunding in that the company is not an
incentive-based crowdfunding website. Although it does allow projects
that are meant to fund other projects for musicians, inventors, etc.,
the business model is set up to allow for donations to personal causes
and life events such as medical bills. GoFundMe also has a special section dedicated solely to users who are trying to raise money to cover their tuition costs. A prominent tuition project helped a user raise $25,000 for an out-of-state tuition to a PhD program. A 2014 tuition project raised over $100,000 for a homeless high school valedictorian to attend college and help his family.
GoFundMe targets social media platforms to create awareness for
campaigns, and encourages individual users to promote their fundraiser
on social media
throughout a campaign. According to a 2018 report by GoFundMe based on
past campaign data, a donor sharing a campaign on social media results
in $15 of donations on average, while any share of a campaign on social
media, regardless of whether the user donated to the campaign, results
in $13 of donations on average.
In 2015, GoFundMe announced that the site would no longer support
legal defense funds on their platform, after the site suspended funding
for the defense of Sweet Cakes by Melissa, a bakery that was fined for refusing to bake a cake for a same-sex wedding. As of November 2017 GoFundMe's terms and conditions allow for campaigns for certain kinds of legal defense.
In November 2017, GoFundMe announced that it will no longer
charge a 5% fee per donation for US, Canada, and UK individual
campaigns, and instead rely upon tips left by donors to support the
website. The processing fee for online credit card payments will still
apply to donations.
In June 2019, GoFundMe terminated a $3 million fund raising for an Australian rugby player, Israel Folau, to finance a court case to appeal his multi-million dollar dismissal. He had quoted 1 Corinthians 6:9–10 on social media, which was said to be homophobic. An alternative fundraising site was set up by the Australian Christian Lobby with the public donating $2 million in 24 hours.
In May 2022, GoFundMe announced the acquisition of non-profit
donation site Classy. It was announced that Classy will remain and
operate as a wholly owned subsidiary of GoFundMe.
Notable projects
Medical fundraising
GoFundMe has described itself as the "leader in online medical fundraising".
One in three campaigns is intended to raise funds for medical costs,
with about 250,000 campaigns for a total of $650 million in
contributions each year. This is partly attributed to the inadequacies of the U.S. healthcare system in which GoFundMe is used to bridge the gap.
CEO Rob Solomon has commented on this, saying that "When we
started in 2010, it wasn't purposefully set up and built to be a
substitute for medical insurance. We weren't ever set up to be a health
care company and we still are not. But over time, people have used
GoFundMe for the most important issues they are faced with."
He also added that the large medical fundraising is the result of
severe problems in his country's healthcare system, saying "The system
is terrible [...] there are people who are not getting relief from us or
from the institutions that are supposed to be there. We shouldn't be
the solution to a complex set of systemic problems."
Official George Floyd Memorial Fund
After the murder of George Floyd,
his brother Philonise Floyd established the fund "to cover funeral and
burial expenses, mental and grief counseling, lodging and travel for all
court proceedings, and to assist our family in the days to come as we
continue to seek justice for George. A portion of these funds will also
go to the Estate of George Floyd for the benefit and care of his
children and their educational fund." One week after the tragedy and
only four days after the start of the fund, it had already raised $7
million, putting it in ranking as one of the most highly funded GoFundMe
campaigns to date.
The $1K Project
Created by entrepreneurs and investors Alex Iskold and Minda Brusse in response to the novel coronavirus pandemic,
The $1K Project uses individual GoFundMe pages to match specific donors
with specific families who have been adversely affected by the
pandemic. Donors agree to contribute a minimum of $1,000 per month for
three months, for a total of $3,000 per family. Small-dollar donors can
make contributions that are pooled together and then matched to a
family. In August 2020, Andrew Yang's Humanity Forward Foundation
committed to matching donations, dollar-for-dollar, up to $1 million.
As of mid-October 2020, more than 800 families had been fully funded.
Sweet Cakes By Melissa
In 2015, after the site suspended funding for the defense of Sweet Cakes by Melissa,
a bakery that was fined for refusing to bake a cake for a same-sex
wedding, GoFundMe announced that the site would no longer support legal
defense funds on their platform. As of November 2017 GoFundMe's terms and conditions allow for campaigns for certain kinds of legal defense.
Help Chelsea Manning Pay Her Court Fines
Created by Kelly Wright to raise money to help former intelligence analyst and whistleblower Chelsea Manning pay $256,000 in court fines levied against her after her refusal to testify to a grand jury about WikiLeaks founder Julian Assange. Nearly 7,000 contributions ranging from $5 to $10,000 were made within two days.
Charity fraud
MMS Defense Fund
Nominally a legal defense fund for Louis Daniel Smith, who faced criminal charges in relation to him selling "MMS" (Miracle Mineral Supplement). On May 27, 2015, Smith was found guilty of fraud and other charges. On May 31, 2015, the mmsdefensefund was removed from GoFundMe (an archived copy is available).
Paying it Forward
This fundraiser was created by Kate McClure, Mark D'Amico, and Johnny Bobbitt Jr. to swindle people.
Their fictitious story was that Bobbitt, a homeless veteran, spent his
last $20 to assist McClure on the highway when her car ran out of
gasoline. Widely reported in the US and internationally, it exceeded its
goal by 4000% but when they began publicly squabbling for the money, an
investigation was launched and all three were arrested and charged with
theft by deception. They pleaded guilty and were sentenced to one year and a day, five years and five-year special probation, respectively.
We The People Built the Wall!
Created with the goal of building a wall as private citizens to inhibit illegal entry along the U.S.-Mexico border. The founder, Brian Kolfage started a nonprofit with the money, We Build the Wall, which has constructed sections of the wall. Currently most money raised on GoFundMe, but in August 2020, Kolfage was indicted, along with Steve Bannon and two other co-defendants, on federal charges of defrauding
hundreds of thousands of "We Build the Wall" donors by diverting money
that was raised to personal use. Federal prosecutors said that despite
"repeatedly assuring donors" that Kolfage would not be paid, the
defendants engaged in a scheme to divert $350,000 to Kolfage, "which he
used to fund his lavish lifestyle." He was separately indicted in May 2021 on federal charges of defrauding the IRS and filing false tax returns.
For victims of mass shootings in the U.S.
Bucks for Bauman
This project was created for Jeff Bauman after he lost both legs during the Boston Marathon bombing.
Celeste & Sydney Recovery Fund
Celeste and Sydney Corcoran were both victims of the Boston Marathon bombing: Sydney suffered severe injuries as a result of being hit with shrapnel, and Celeste lost both legs below her knees. This campaign page was created for their ongoing rehabilitation.
Support Victims of Pulse Shooting
This fundraiser was created by Equality Florida to help the victims of a nightclub shooting in Orlando, Florida.
Over 90,000 people have contributed to this campaign. GoFundMe
headquarters donated $100,000 and waived every transaction fee for this
campaign.
There are a number of fundraisers for individual victims of the February 14, 2018, Stoneman Douglas High School Shooting in Parkland, Florida to help survivors' recovery and to fund causes chosen by family members in honor of the deceased.
Canada convoy protest
In January 2022, Prime Minister Justin Trudeau announced that truck drivers crossing into Canada would have to be fully vaccinated. In response, some truckers organized a convoy to Ottawa under the name Freedom Convoy 2022. A GoFundMe project was then created with the claim of raising money for fuel and food for the convoy.
On February 4, 2022, GoFundMe announced the fundraiser had been removed
from the platform for violating terms of service, specifically
"violence and other unlawful activity".
The company initially stated that $9 million in donations from the
fundraiser would be redistributed to "credible and established
charities" and would only be refunded upon application, subject to a
two-week time limit. Following criticism, the company subsequently
stated on Twitter that all donations would be refunded within 10
business days.
Anti-vaccine fundraisers
In March 2019, GoFundMe banned fundraisers from anti-vaccine activists, including Stop Mandatory Vaccination founder Larry Cook, citing violations of their terms of service. Despite the ban, The Independent found that several anti-vaccine campaigns were still running on GoFundMe as of May 2019.
In December 2021, The Sunday Times
reported that GoFundMe had enabled the donation of over €300,000 to
anti-vaccine campaigns and challenges to vaccine certificates.
In January 2023, the British disinformation analysis organization Logically reported that GoFundMe had funneled over $330,000 in donations to fundraisers for injuries supposedly caused by the COVID-19 vaccine.
Jean Messiha's fundraising
On Tuesday, 27 June 2023, 17-year-old Nahel Merzouk
was killed by a French police officer after he failed to comply with
traffic stops. While the police officer has been arrested on suspicion
of "voluntary homicide by a person in authority", far-right activist Jean Messiha
organised a controversial crowdfunding in favour of the police
officer's family which reached €1.6 million. The killing sparked widespread protests and riots in France. Nahel Merzouk's family has filed a complaint against Jean Messiha.
Grayzone donations freeze
In August 2023, GoFundMe froze more than $90,000 from 1,100 contributors to The Grayzone, a fringe pro-Kremlin far-left news website, citing unspecified "external concerns". Grayzone founder Max Blumenthal said he believed the concerns were political and related to the platform's coverage of the Russian invasion of Ukraine.
A foundation (also referred to as a charitable foundation) is a type of nonprofit organization or charitable trust that usually provides funding and support to other charitable organizations
through grants, while also potentially participating directly in
charitable activities. Foundations encompass public charitable
foundations, like community foundations, and private foundations, which are often endowed
by an individual or family. Nevertheless, the term "foundation" might
also be adopted by organizations not primarily engaged in public
grantmaking.
Description
Legal
entities existing under the status of "foundations" have a wide
diversity of structures and purposes. Nevertheless, there are some
common structural elements.
Chart of a foundation
Legal requirements followed for establishment
Purpose of the foundation
Economic activity
Supervision and management provisions
Accountability and auditing provisions
Provisions for the amendment of the statutes or articles of incorporation
Provisions for the dissolution of the entity
Tax status of corporate and private donors
Tax status of the foundation
Some of the above must be, in most jurisdictions, expressed in the
document of establishment. Others may be provided by the supervising
authority at each particular jurisdiction.
Europe
There is no commonly accepted legal definition across Europe for a foundation. There was a proposal for a European Foundation Statute, a legal form that would create a legal definition recognised across all EU Member States. However, this proposal was withdrawn in 2015 following its failure to pass through COREPER 1.
Foundations in civil law
The term "foundation", in general, is used to describe a distinct legal entity. Foundations as legal structures (legal entities) and/or legal persons (legal personality)
may have a diversity of forms and may follow varying regulations
depending on the jurisdiction where they are created. Foundations are
often set up for charitable purposes, family patrimony and collective purposes which can include education or research.
In some jurisdictions, a foundation may acquire its legal
personality when it is entered in a public registry, while in other
countries a foundation may acquire legal personality by the mere action
of creation through a required document. Unlike a company, foundations
have no shareholders,
though they may have a board, an assembly and voting members. A
foundation may hold assets in its own name for the purposes set out in
its constitutive documents, and its administration and operation are
carried out in accordance with its statutes or articles of association
rather than fiduciary principles. The foundation has a distinct patrimony independent of its founder.
Finland
In Finland, foundations (Finnish: säätiö, Swedish: stiftelse) are regulated by the Finnish Patent and Registration Office and have the four following characteristics:
They are set up to manage property donated for a particular purpose.
This purpose is determined when establishing the foundation.
Foundations have neither owners, shareholders, nor members.
A board of trustees ensures that the foundation operates
appropriately, and is responsible for ensuring that the investments by
the foundation are secure and profitable.
Foundations are considered legal persons in Finland. The Foundations
Act in 2015 dramatically updated the laws regarding foundations.
France
There
are not many foundations in comparison to the rest of Europe. In
practice public administration requires at least €1 million necessary.
State representatives have a mandatory seat in the board.
Germany
German regulations allow the creation of any foundation for public or private purposes in keeping with the concept of a gemeinwohlkonforme Allzweckstiftung
("general-purpose foundation compatible with the common good"). A
foundation should not have commercial activities as its main purpose,
but they arre permitted if they serve the main purpose of the
foundation. There is no minimum starting capital, although in practice
at least €50,000 is considered necessary.
A German foundation can either be charitable or serve a private
interest. Charitable foundations enjoy tax exemptions. If they engage in
commercial activities, only the commercially active part of the entity
is taxed. A family foundation serving private interests is taxed like
any other legal entity. There is no central register for German
foundations.
Only charitable foundations are subject to supervision by state
authorities. Family foundations are not supervised after establishment.
All forms of foundations can be dissolved, however, if they pursue
anti-constitutional aims. Foundations are supervised by local
authorities within each state (Bundesland) because each state has exclusive legislative power over the laws governing foundations.
In contrast to many other countries, German law allows a
tax-sheltered charitable foundation to distribute up to one-third of its
profit to the founder and his next of kin, if they are needy, or to
maintain the founder's grave. These benefits are subject to taxation.
As of 2008, there are about 15,000 foundations in Germany, about
85% of them charitable foundations. More than 250 charitable German
foundations have existed for more than 500 years; the oldest dates back
to 1509. There are also large German corporations owned by foundations,
including Bertelsmann, Bosch, Carl Zeiss AG and Lidl. Foundations are the main providers of private scholarships to German students.
Italy
In
Italy, a foundation is a private non-profit and autonomous
organization, its assets must be dedicated to a purpose established by
the founder. The founder cannot receive any benefits from the foundation
or have reverted the initial assets. The private foundations or civil
code foundations are under the section about non commercial entities of
the first book of the Civil Code of Law
of 1942. Article 16 CC establishes that the foundation's statutes must
contain its name, purpose, assets, domicile, administrative organs and
regulations, and how the grants will be distributed. The founder must
write a declaration of intention including a purpose and endow assets
for such purpose. This document can be in the form of a notarized deed
or a will. To obtain legal personality, the foundation must enroll in
the legal register of each prefettura
(local authority) or some cases the regional authority. There are
several nuances in requirements according to each foundation's purpose
and area of activity.
A foundation (Fundação) in Portugal is regulated by Law 150/2015,
with the exception of religious foundations, which are regulated by the
Religious Freedom Law. Foundations may be private, wholly public
(created and managed exclusively by public bodies), or public but with
private management (created by public entities and optionally also
private entities, but whose management is dominated by private
entities). Foundations may only be operational after being recognized by
the Prime Minister of Portugal.
Foundations must designate and pursue at least one of twenty-five
public benefit goals defined by law. They must also have enough assets
to pursue those goals. They may not benefit the founders or any other
restricted group, but the general public.
Portuguese foundations may voluntarily associate themselves via the Portuguese Foundation Centre (CPF – Centro Português de Fundações), that was founded in 1993 by the Eng. António de Almeida Foundation, the Calouste Gulbenkian Foundation and the Oriente Foundation.
Spain
Foundations
in Spain are organizations founded with the purpose of not seeking
profit and serving the general needs of the public. Such foundations
may be founded by private individuals or by the public. These
foundations have an independent legal personality separate from their
founders. Foundations serve the general needs of the public with a
patrimony that funds public services and may not be distributed to the
founders' benefit.
Sweden
A foundation in Sweden (Swedish: stiftelse)
is a legal entity without an owner. It is formed by a letter of
donation from a founder donating funds or assets to be administered for a
specific purpose. When the purpose is for the public benefit, a
foundation may enjoy favorable tax treatment. A foundation may have
diverse purposes, including but not limited to public benefit,
humanitarian or cultural purposes, religious, collective, familiar, or
the simple passive administration of funds. Normally, the supervision of
a foundation is done by the county government where the foundation has
its domicile, however, large foundations must be registered by the
county administrative board (CAB), which must also supervise the
administration of the foundation. The main legal instruments governing
foundations in Sweden are the Foundation Act (1994:1220) and the
Regulation for Foundations (1995:1280).
Switzerland
A foundation needs to be registered with the company register.
Under Canadian law, registered charities may be designated as charitable organizations, public foundations, or private
foundations. The designation depends on factors such as the charity's
structure, funding sources, and mode of operation. Charities receive
notification of their designation from the Canada Revenue Agency (CRA)
upon registration. A charity with only one director or trustee is
automatically designated as a private foundation. To be designated as a
charitable organization or public foundation, more than half of the
directors, trustees, or officials must be at arm's length. The CRA
applies specific criteria to determine the designation, including the
charity's purposes, activities, income allocation, and relationships
with officials and donors.
Ireland
The
law does not prescribe any particular form for a foundation in Ireland.
Most commonly, foundations are companies limited by guarantees or
trusts. A foundation can obtain a charity registration number from the
Revenue Commissioners for obtaining tax relief as far as they can be
considered under the law on charity, however, charitable status does not
exist in Ireland. The definition usually applied is that from the
Pemsel Case of English jurisprudence (1891) and the Irish Income Tax Act
1967.
Trusts have no legal personality and companies acquire their legal
status through the Company law and the required documents of
incorporation. Foundations are not required to register with any public
authority.
United Kingdom
In the UK, the word "foundation" is sometimes used in the title of a charity, as in the British Heart Foundation and the Fairtrade Foundation. Despite this, the term is not generally used in English law, and (unlike in civil law systems) the term has no precise meaning. Instead, the concept of charitable trust is in use (for example, the Wellcome Trust).
The States of Jersey
are considering introducing civil law type foundations into its law. A
consultation paper presenting a general discussion on foundations was
brought forth to the Jersey government concerning this possibility. It
was adopted by the states of Jersey on 22 October 2008 through the
Foundations (Jersey) Law 200.
In the United States, many philanthropic and charitable organizations (such as the Bill & Melinda Gates Foundation)
are considered to be foundations. However, the Internal Revenue Code
distinguishes between private foundations (usually endowed by an
individual, family, or corporation) and public charities (community foundations
or other nonprofit groups that raise money from the general public).
While they offer donors more control over their charitable giving,
private foundations have more restrictions and fewer tax benefits than
public charities.
International networks
At an international level there are a series of networks and associations of foundations, among them Council on Foundations, EFC (European Foundation Centre), WINGS (Worldwide Initiatives for Grantmaker Support). Those organization also have a role in supporting research on foundations.
The legal definition of a charitable organization (and of
charity) varies between countries and in some instances regions of the
country. The regulation,
the tax treatment, and the way in which charity law affects charitable
organizations also vary. Charitable organizations may not use any of
their funds to profit individual persons or entities.
However, some charitable organizations have come under scrutiny for
spending a disproportionate amount of their income to pay the salaries
of their leadership.
The second-hand shop of UFF (U-landshjälp från Folk till Folk i Finland), a non-profit and non-governmental humanitarian foundation, in Jyväskylä, Finland
Financial figures (e.g. tax refunds, revenue from fundraising,
revenue from the sale of goods and services or revenue from investment,
and funds held in reserve) are indicators to assess the financial
sustainability of a charity, especially to charity evaluators. This information can impact on a charity's reputation with donors and societies, and thus the charity's financial gains.
Charitable organizations often depend partly on donations from
businesses. Such donations to charitable organizations represent a major
form of corporate philanthropy.
To meet the exempt organizational test requirements, a charity has to be exclusively organized and operated, and to receive and pass the exemption test, a charitable organization must follow the public interest and all exempt income should be for the public interest. For example, in many countries of the Commonwealth, charitable organizations must demonstrate that they provide a public benefit.
History
Early systems
Until the mid-18th century, charity was mainly distributed through religious structures (such as the English Poor Laws of 1601), almshouses,
and bequests from the rich. Christianity, Judaism, and Islam
incorporated significant charitable elements from their very beginnings, and dāna
(alms-giving) has a long tradition in Hinduism, Jainism, Buddhism, and
Sikhism. Charities provided education, health, housing, and even
prisons. Almshouses were established throughout Europe in the Early Middle Ages to provide a place of residence for the poor, old, and distressed people; King Athelstan of England (reigned 924–939) founded the first recorded almshouse in York in the 10th century.
During the Enlightenment era, charitable and philanthropic activity among voluntary associations and affluent benefactors became a widespread cultural practice. Societies, gentlemen's clubs, and mutual associations began to flourish in England,
with the upper classes increasingly adopting a philanthropic attitude
toward the disadvantaged. In England, this new social activism led to
the establishment of charitable organizations, which proliferated from
the middle of the 18th century.
This emerging upper-class trend for benevolence resulted in the
incorporation of the first charitable organizations. Appalled by the
number of abandoned children living on the streets of London, CaptainThomas Coram set up the Foundling Hospital in 1741 to care for these unwanted orphans in Lamb's Conduit Fields, Bloomsbury. This institution, the world's first of its kind, served as the precedent for incorporated associational charities in general.
Painting by Antoine-Alexandre Morel (1765–1829) depicting charity during the Enlightenment era
Another notable philanthropist of the Enlightenment era, Jonas Hanway, established The Marine Society in 1756 as the first seafarers' charity, aiming to aid the recruitment of men into the navy. By 1763, the Society had enlisted over 10,000 men, and an Act of Parliament incorporated it in 1772. Hanway also played a key role in founding the Magdalen Hospital to rehabilitate prostitutes.
These organizations were funded by subscriptions and operated as
voluntary associations. They raised public awareness about their
activities through the emerging popular press and generally enjoyed high
social regard. Some charities received state recognition in the form of
a royal charter.
Charities also began to take on campaigning roles, championing
causes and lobbying the government for legislative changes. This
included organized campaigns against the mistreatment of animals and
children, as well as the successful campaign in the early 19th century
to end the slave trade throughout the British Empire and its extensive sphere of influence. (However, this process was quite lengthy, concluding when slavery in Saudi Arabia was abolished slavery in 1962.)
The Enlightenment era also witnessed a growing philosophical
debate between those advocating for state intervention and those
believing that private charities should provide welfare. The political economist, Reverend Thomas Malthus (1766–1834), criticized poor relief for paupers on economic and moral grounds and proposed leaving charity entirely to the private sector. His views became highly influential and informed the Victorianlaissez-faire attitude toward state intervention for the poor.
Growth during the 19th century
During the 19th century, a profusion of charitable organizations emerged to alleviate the awful conditions of the working class in the slums. The Labourer's Friend Society, chaired by Lord Shaftesbury
in the United Kingdom in 1830, aimed to improve working-class
conditions. It promoted, for example, the allotment of land to laborers
for "cottage husbandry", which later became the allotment movement. In 1844, it became the first Model Dwellings Company –
one of a group of organizations that sought to improve the housing
conditions of the working classes by building new homes for them, all
the while receiving a competitive rate of return on any investment. This
was one of the first housing associations, a philanthropic endeavor that flourished in the second half of the nineteenth century, brought about by the growth of the middle class. Later associations included the Peabody Trust (originating in 1862) and the Guinness Trust (founded in 1890). The principle of philanthropic intention with capitalist return was given the label "five percent philanthropy".
There was strong growth in municipal charities. The Brougham Commission led to the Municipal Corporations Act 1835, which reorganized multiple local charities by incorporating them into single entities under supervision from the local government.
Charities at the time, including the Charity Organization Society
(established in 1869), tended to discriminate between the "deserving
poor", who would be provided with suitable relief, and the
"underserving" or "improvident poor", who was regarded as the cause of
their woes due to their idleness. Charities tended to oppose the
provision of welfare by the state, due to the perceived demoralizing effect.
Although minimal state involvement was the dominant philosophy of the
period, there was still significant government involvement in the form
of statutory regulation and even limited funding.
Philanthropy became a very fashionable activity among the expanding middle classes in Britain and America. Octavia Hill (1838–1912) and John Ruskin (1819–1900) were important forces behind the development of social housing, and Andrew Carnegie (1835–1919) exemplified the large-scale philanthropy of the newly rich in industrialized America. In Gospel of Wealth (1889), Carnegie wrote about the responsibilities of great wealth and the importance of social justice. He established public libraries throughout English-speaking countries and contributed large sums to schools and universities. A little over ten years after his retirement, Carnegie had given away over 90% of his fortune.
Towards the end of the 19th century, with the advent of the New Liberalism and the innovative work of Charles Booth in documenting working-class life in London, attitudes towards poverty began to change. This led to the first social liberalwelfare reforms, including the provision of old age pensions and free school-meals.
With the advent of the Internet, charitable organizations established a presence on online social media platforms and began initiatives such as cyber-based humanitarian crowdfunding, exemplified by platforms like GoFundMe.
By jurisdiction
Australia
The definition of charity in Australia is derived from English common law, originally from the Charitable Uses Act 1601,
and then through several centuries of case law based upon it. In 2002,
the federal government initiated an inquiry into the definition of a
charity. The inquiry proposed a statutory definition of a charity, based
on the principles developed through case law. This led to the Charities Bill 2003,
which included limitations on the involvement of charities in political
campaigning, an unwelcome departure from the case law as perceived by
many charities. The government appointed a Board of Taxation inquiry to
consult with charities on the bill. However, due to widespread criticism
from charities, the government abandoned the bill.
Subsequently, the government introduced the Extension of Charitable Purpose Act 2004.
This act did not attempt to codify the definition of a charitable
purpose but rather aimed to clarify that certain purposes were
charitable, resolving legal doubts surrounding their charitable status.
Among these purposes were childcare, self-help groups, and
closed/contemplative religious orders.
To publicly raise funds, a charity in Australia must register in
each Australian jurisdiction in which it intends to raise funds. For
example, in Queensland, charities must register with the Queensland Office of Fair Trading.[22]
Additionally, any charity fundraising online must obtain approval from
every Australian jurisdiction that mandates such approval. Currently,
these jurisdictions include New South Wales, Queensland, Victoria,
Tasmania, Western Australia, and the Australian Capital Territory.
Numerous Australian charities have appealed to federal, state, and
territory governments to establish uniform legislation enabling
charities registered in one state or territory to raise funds in all
other Australian jurisdictions.
A Public Benevolent Institution (PBI) is a specific type
of charity with its primary purpose being to alleviate suffering in the
community, whether due to poverty, sickness, or disability. Examples of
institutions that might qualify include hospices, providers of
subsidized housing, and certain not-for-profit aged care services.
Charities in Canada need to be registered with the Charities Directorate of the Canada Revenue Agency. According to the Canada Revenue Agency:
A registered charity is an organization established and operated for
charitable purposes. It must devote its resources to charitable
activities. The charity must be a resident in Canada and cannot use its
income to benefit its members.
A charity also has to meet a public benefit test. To qualify under this
test, an organization must show that:
its activities and purposes provide a tangible benefit to the public.
those eligible for benefits are either the public as a whole or a
significant section of it. They should not be a restricted group or one
where members share a private connection, such as social clubs or
professional associations with specific memberships.
the charity's activities must be legal and must not be contrary to public policy.
To register as a charity, the organization has to be either incorporated
or governed by a legal document called a trust or a constitution. This
document has to explain the organization's purposes and structure.
France
Most French charities are registered under the statute of loi d'association de 1901, a type of legal entity for non-profit NGOs. This statute is extremely common in France
for any type of group that wants to be institutionalized (sports clubs,
book clubs, support groups...), as it is very easy to set up and
requires very little documentation. However, for an organization under
the statute of loi 1901 to be considered a charity, it has to file with the authorities to come under the label of "association d'utilité publique", which means "NGO acting for the public interest". This label gives the NGO some tax exemptions.
Hungary
In Hungary, charitable organizations are referred to as "public-benefit organizations" (Hungarian: közhasznú szervezet). The term was introduced on 1 January 1997 through the Act on Public Benefit Organizations.
India
Under
Indian law, legal entities such as charitable organizations,
corporations, and managing bodies have been given the status of "legal persons" with legal rights, such as the right to sue and be sued, and the right to own and transfer property. Indian charitable organizations with this status include Sir Ratan Tata Trust.
Ireland
In Ireland, the Charities Act (2009) legislated the establishment of a "Charities Regulatory Authority", and the Charities Regulator was subsequently created via a ministerial order in 2014.
This was the first legal framework for charity registration in Ireland.
The Charities Regulator maintains a database of organizations that have
been granted charitable tax exemption—a list previously maintained by
the Revenue Commissioners. Such organizations would have a CHY number from the Revenue Commissioners, a CRO number from the Companies Registration Office, and a charity number from the Charities Regulator.
The Irish Nonprofits Database was created by Irish Nonprofits
Knowledge Exchange (INKEx) to serve as a repository for regulatory and
voluntarily disclosed information about Irish public benefit nonprofits.
Nigeria
Charitable organizations in Nigeria are registerable under "Part C" of the Companies and Allied Matters Act, 2020. Under the law, the Corporate Affairs Commission, Nigeria,
being the official Nigerian Corporate Registry, is empowered to
maintain and regulate the formation, operation, and dissolution of
charitable organizations in Nigeria.[33] Charitable organizations in Nigeria are exempted under §25(c) of the Companies Income Tax Act (CITA) Cap. C21 LFN 2004 (as amended), which exempts from income tax corporate organizations engaged wholly in ecclesiastical, charitable, or educational activities. Similarly, §3 of the Value Added Tax Act (VATA) Cap. V1 LFN 2004 (as amended),
and the 1st Schedule to the VATA on exempted Goods and Services goods
zero-rates goods and services purchased by any ecclesiastical,
charitable, or educational institutions in furtherance of their
charitable mandates.
Poland
A public benefit organization (Polish: organizacja pożytku publicznego, often abbreviated as OPP) is a term used in Polish law. It was introduced on 1 January 2004 by the statute on public good activity and volunteering. Charitable organizations of public good are allowed to receive 1.5% of income tax from individuals, making them "tax-deductible organizations". To receive such status, an organization has to be a non-governmental organization,
with political parties and trade unions not qualifying. The
organization must also be involved in specific activities related to the
public good as described by the law, and it should demonstrate
sufficient transparency in its activities, governance, and finances.
Moreover, data has shown that this evidence is pertinent and sensible.
The
legislation governing charitable activities and the process of
obtaining charitable organization status is regulated by Ukraine's Civil
Code and the Law of Ukraine on Charitable Activities and Charitable
Organizations.
According to Ukrainian law, there are three forms of charitable organizations:
A "charitable society" is a charitable organization created by
at least two founders and operates based on the charter or statute.
A "charitable institution" is a type of charitable trust that acts
based on the constituent or founding act. This charitable organization's
founding act defines the assets that one or several founders transfer
to achieve the goals of charitable activity, along with any income from
such assets. A constituent act of a charitable institution may be
contained in a will or testament. The founder or founders of the
charitable institution do not participate in the management of such a
charitable organization.
A "charitable fund" or "charitable foundation" is a charitable
organization that operates based on the charter, has participants or
members, and is managed by them. Participants or members are not obliged
to transfer any assets to such an organization to achieve the goals of
charitable activity. A charitable foundation can be created by one or
several founders. The assets of a charitable fund can be formed by
participants and/or other benefactors.
The Ministry of Justice of Ukraine is the main registration authority for charitable organization registration and constitution. Individuals and legal entities, except for public authorities and local governments,
can be the founders of charitable organizations. Charitable societies
and charitable foundations may have, in addition to founders, other
participants who have joined them as prescribed by the charters of such
charitable associations or charitable foundations. Aliens
(non-Ukrainian citizens and legal entities, corporations, or
non-governmental organizations) can be the founders and members of
philanthropic organizations in Ukraine.
All funds received by a charitable organization and used for
charitable purposes are exempt from taxation, but obtaining non-profit
status from the tax authority is necessary.
Legalization is required for international charitable funds to operate in Ukraine.
United Kingdom
Charity law in the UK varies among (i) England and Wales, (ii) Scotland and (iii) Northern Ireland,
but the fundamental principles are the same. Most organizations that
are charities are required to be registered with the appropriate
regulator for their jurisdiction, but significant exceptions apply so
that many organizations are bona fide charities but do not appear on a public register. The registers are maintained by the Charity Commission for England and Wales and by the Office of the Scottish Charity Regulator for Scotland. The Charity Commission for Northern Ireland
maintains a register of charities that have completed formal
registration (see below). Organizations applying must meet the specific
legal requirements summarized below, have filing requirements with their
regulator, and are subject to inspection or other forms of review. The
oldest charity in the UK is The King's School, Canterbury, established in 597 AD.
Charitable organizations, including charitable trusts, are
eligible for a complex set of reliefs and exemptions from taxation in
the UK. These include reliefs and exemptions in relation to income tax, capital gains tax, inheritance tax, stamp duty land tax, and value added tax. These tax exemptions have led to criticisms that private schools are able to use charitable status as a tax avoidance technique rather than offering a genuine charitable good.
the promotion of the efficiency of the armed forces of the Crown or
of the police, fire and rescue services or ambulance services
other purposes currently recognized as charitable and any new
charitable purposes which are similar to another charitable purpose.
A charity must also provide a public benefit.
Before the Charities Act 2006,
which introduced the definition now contained in the 2011 Act, the
definition of charity arose from a list of charitable purposes in the Charitable Uses Act 1601 (also known as the Statute of Elizabeth), which had been interpreted and expanded into a considerable body of case law. In Commissioners for Special Purposes of Income Tax v. Pemsel
(1891), Lord McNaughten identified four categories of charity which
could be extracted from the Charitable Uses Act and which were the
accepted definition of charity prior to the Charities Act 2006:
other purposes considered beneficial to the community.
Charities in England and Wales—such as Age UK, the Royal Society for the Protection of Birds (RSPB) and the Royal Society for the Prevention of Cruelty to Animals (RSPCA) – must comply with the 2011 Act regulating matters such as charity reports and accounts and fundraising.
Structures
As of 2011, there are several types of legal structures for a charity in England and Wales:
The unincorporated association is the most common form of organization within the voluntary sector in England and Wales.
This is essentially a contractual arrangement between individuals who
have agreed to come together to form an organization for a particular
purpose. An unincorporated association will normally have a constitution
or set of rules as its governing document, which will deal with matters
such as the appointment of office bearers and the rules governing
membership. The organization is not, however, a separate legal entity,
so it cannot initiate legal action, borrow money, or enter into
contracts in its own name. Its officers can be personally liable if the
charity is sued or has debts.
A trust
is essentially a relationship among three parties: the donor of some
assets, the trustees who hold the assets, and the beneficiaries (those
eligible to benefit from the charity). When the trust has charitable
purposes and is a charity, the trust is known as a charitable trust. The
governing document is the trust deed or declaration of trust, which
comes into operation once signed by all the trustees. The main
disadvantage of a trust is that, like an unincorporated association, it
lacks a separate legal entity, and the trustees must themselves own
property and enter into contracts. The trustees are also liable if the
charity is sued or incurs liability.
A company limited by guarantee is a private limited company where
members' liability is limited. A guarantee company does not have a
share capital, but instead has members who are guarantors rather than
shareholders. If the company is wound up, the members agree to pay a
nominal sum, which can be as little as £1. A company limited by
guarantee is a useful structure for a charity where trustees need
limited liability protection. Moreover, the charity has legal
personality and can enter into contracts, such as employment contracts,
in its own name.
A small number of charities are incorporated by royal charter,
a document that creates a corporation with legal personality (or, in
some cases, transforms a charity incorporated as a company into a
charity incorporated by royal charter). The charter must be approved by
the Privy Council
before receiving royal assent. While the nature of the charity will
vary depending on the clauses enacted, a royal charter generally offers a
charity the same limited liability as a company and the ability to
enter into contracts.
The Charities Act 2006 introduced a new legal form of incorporation designed specifically for charities—the charitable incorporated organization
(CIO)—with powers similar to a company but without the need to register
as a company. Becoming a CIO was only made possible in 2013, with
staggered introduction dates, with the charities with the highest
turnover eligible first.
The term foundation is not commonly used in England and Wales. Occasionally, a charity will use the word as part of its name (e.g., British Heart Foundation),
but this has no legal significance and provides no information about
the charity's work or legal structure. The organization's structure will
fall into one of the types described above.
Registration
Charitable organizations with an income of over £5,000 and subject to the law of England and Wales must register with the Charity Commission for England and Wales, unless they are an "exempt" or "excepted" charity.
For companies, the law of England and Wales will usually apply if the
company itself is registered in England and Wales. In other cases, if
the governing document doesn't specify, the law that applies will be the
one most connected with the organization.
When an organization's income doesn't exceed £5,000, it can't
register as a charity with the Charity Commission for England and Wales,
unless registered as a Charitable Incorporated Organisation, in which
case there is no minimum annual income. With the increase in the mandatory registration level to £5,000 by The Charities Act 2006,
smaller charities can rely on HMRC recognition to demonstrate their
charitable purpose and confirm their not-for-profit principles.
Churches with an annual income of less than £100,000 need not register.
Some charities, referred to as exempt charities,
aren't required to register with the Charity Commission and aren't
subject to its supervisory powers. These charities include most
universities and national museums, as well as some other educational
institutions. Other charities are excepted from the need to register but
are still subject to the supervision of the Charity Commission. The
regulations on excepted charities were changed by the Charities Act 2006. Many excepted charities are religious charities.
Northern Ireland
The Charity Commission for Northern Ireland was established in 2009
and has received the names and details of over 7,000 organizations in
Northern Ireland that have previously been granted charitable status for
tax purposes (the "deemed list"). Compulsory registration of
organizations from the deemed list began in December 2013, and it is
expected to take three to four years to complete. The new Register of Charities is publicly available on the CCNI website
and contains the details of those organizations that have so far been
confirmed by the commission to exist for charitable purposes and the
public benefit. The Commission estimates that between 5,000 and 11,500
charitable organizations need to be formally registered in total.
In the United States, a charitable organization is an organization operated for purposes that are beneficial to the public interest. There are different types of charitable organizations. Every U.S. and foreign charity that qualifies as tax-exempt under Section 501(c)(3) of the Internal Revenue Code (IRC) is considered a "private foundation" unless it demonstrates to the Internal Revenue Service
(IRS) that it falls into another category. Generally, any organization
that is not a private foundation (i.e., it qualifies as something else)
is usually a public charity as described in Section 509(a) of the IRC.
In addition, a private foundation usually derives its principal
funding from an individual, family, corporation, or some other single
source, and it is more often than not a grantmaker that does not solicit funds from the public. In contrast, a foundation
or public charity generally receives grants from individuals,
government, and private foundations. While some public charities engage
in grantmaking activities, most conduct direct service or other
tax-exempt activities. Foundations that are generally grantmakers (i.e.,
they use their endowment
to make grants to other organizations, which in turn carry out the
goals of the foundation indirectly) are usually called "grantmaker" or
"non-operating" foundations.
The requirements and procedures for forming charitable
organizations vary from state to state, as do the registration and
filing requirements for charitable organizations that conduct charitable
activities, solicit charitable contributions, or hire professional
fundraisers.
In practice, the detailed definition of a "charitable organization" is
determined by the requirements of state law where the charitable
organization operates, and the requirements for federal tax relief by
the IRS.
Resources exist to provide information, including rankings, of US charities.
Federal tax relief
Federal
tax law provides tax benefits to nonprofit organizations recognized as
exempt from federal income tax under section 501(c)(3) of the IRC. The
benefits of 501(c)(3) status include exemption from federal income tax
as well as eligibility to receive tax-deductible charitable
contributions. In 2017, there were a total of $281.86 billion in
tax-deductible donations by individuals.
To qualify for 501(c)(3) status, most organizations must apply to the IRS for such status.
Several requirements must be met for a charitable organization to
obtain 501(c)(3) status. These include the organization being organized
as a corporation, trust, or unincorporated association. The
organization's organizing document (such as the articles of
incorporation, trust documents, or articles of association) must limit
its purposes to being charitable and permanently dedicate its assets to
charitable purposes. The organization must refrain from undertaking a
number of other activities, such as participating in the political
campaigns of candidates for local, state, or federal office.
Additionally, the organization must ensure that its earnings do not
benefit any individual. Most tax-exempt organizations are required to file annual financial reports (IRS Form 990)
at the state and federal level. A tax-exempt organization's Form 990
and some other forms are required to be made available for public
scrutiny.
The types of charitable organizations that the IRS considers to be organized for the public benefit include those organized for:
Relief of the poor, the distressed, or the underprivileged
Advancement of religion
Advancement of education or science
Construction or maintenance of public buildings, monuments, or works
Lessening the burdens of government
Lessening neighborhood tensions
Elimination of prejudice and discrimination
Defense of human and civil rights secured by law
Combating community deterioration and juvenile delinquency.
A number of other organizations may also qualify for exempt status,
including those organized for religious, scientific, literary, and
educational purposes, as well as those for testing for public safety and
for fostering national or international amateur sports competition, and
for the prevention of cruelty to children or animals.
Criticism
The charity has received various criticisms, for example:
Charities sometimes give aid conditionally,
through eligibility requirements such as sobriety, piety, curfews,
participation in job training or parenting courses, cooperation with the
police, or identifying the paternity of children, charity models
enforce the concept that only those who can prove their moral worth
deserve help, motivating citizens to accept exploitative wages or
conditions to avoid being subject to the charitable system.
Charity is increasingly privatized and contracted out to the massive
nonprofit sector, where organizations compete for grants to address
social problems. Donors can protect their money from taxation by storing
it in foundations that fund their pet projects, most of which have
nothing to do with poor people.
Economist Robert Reich criticized the practice of billionaires giving some of their money to charity, calling it mostly "self-serving rubbish".Mathew Snow of American socialist magazine Jacobin
criticized charity for "creating an individualized 'culture of giving'"
instead of "challenging capitalism's institutionalized taking."
Charity fraud
Charity fraud, also known as a donation scam, is the act of using deception
to obtain money from people who believe they are donating to a charity.
Often, individuals or groups will present false information claiming to
be a charity or associated with one, and then ask potential donors for
contributions to this non-existent charity. Charity fraud
encompasses not only fictitious charities but also deceptive business
practices. These deceitful acts by businesses may involve accepting
donations without using the funds for their intended purposes or
soliciting funds under false pretenses of need.
