The following is an excerpt from Ice Miller's
Business Transition Strategies to Preserve Wealth Guide, which
provides insights on a variety of topics to help ensure a smooth
business transition.
Many families (or related corporations) are interested in giving
back to the community in the form of charitable contributions. A
private foundation is an ideal vehicle for accomplishing this goal,
for two reasons: (1) it can be used to provide direct monetary
assistance to local charitable organizations, thereby helping the
less fortunate, and (2) contributions to a private foundation may
serve to reduce a donor's taxes.
What is a Private Foundation?
A private foundation is typically formed as a nonprofit
corporation pursuant to a state statute. Once the foundation is
properly formed, it must apply for state and federal tax-exempt
status. Upon receiving a determination that it is exempt from
taxation, the foundation must operate in conformance with state
corporate
