Separation Anxiety And Control Issues For Parallel Foundations

Many charities in Canada have established what are commonly known as a "parallel foundation", which can generally be defined as a separate foundation, which is itself a charity that has been established by the "parent" charity. While many parallel foundations are focused primarily on raising and transferring funds to the parent charity, some also carry on their own charitable activities directly – for example, by running a scholarship program or operating a related business. Notwithstanding, the most common reason for establishing a parallel foundation is to protect the assets of the parent charity by maintaining them in a separate entity and taking advantage of the "limited liability" feature of corporate law under which assets held in one corporation are unavailable to satisfy the liabilities of another separate corporation. Charities that have established a parallel foundation also typically shift their fundraising efforts to the foundation with the goal of