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A Supporting Charitable Foundation is a useful vehicle for
succession planning and tax mitigation. But is also affords its
founder the possibility to carry on his (family) name and do so
in a positive manner. A “once off” gift provides some short-term
recognition; a Charity may endure for generations.
Historically many countries have provided incentives to the
non-profit sector. Charitable organizations represent an economy
equivalent to the worlds eight largest economy.
Public Charities are organizations, that enjoys supports from a
broad range of public donors and use these to support charitable
causes. Public Charities organize, fund raising activities and
support wide range of charitable purposes.
While the philanthropic rewards and tax benefits make public
charities an attractive financial planning vehicle, the public
nature and level of activity required often act as an impediment
for private individuals.
Private Charities on the other hand offer donors more control
over their charitable giving. On the other hand, private
charities are subject to more restrictions and have fewer tax
benefits than public charities
Supporting Charity Foundations
By structuring a private charity as a supporting charity
organization, one can receive almost all the benefits awarded by
a public charity.
A supporting charity organization is a hybrid between private
and public charities. They carry out their charitable purposes
by supporting other public charities and thereby avoid
classification as a more restrictive private charity.
The key feature of a supporting charity organization is its
strong relationship with the charity it supports. The supporting
charity organization is classified as a public charity and is
funded by only one family.
The benefits of a Supporting Charity Foundation, includes
amongst others:
-Can be used by high profile persons with public image concerns.
-The founder can maintain control over the level of support
awarded to the public charity.
-It mitigates estate, capital and income taxes.
-It protects assets from creditors.
-It provides for employment opportunities for children and grand
children.
-It allows the founder a mechanism to support worthy charitable
causes.
A contract dictating the level of support is required between
the supporting charity organization and the public charity.
While it is necessary for the supporting organization to make
distributions each year, the amounts can be controlled by a
board of directors which may include family members.
In addition to offering numerous tax advantages, a Supporting
Charity Foundation serve as an excellent tool to support worthy
social causes and also preserve and enhance the family name.
For more information:
Email us at: rudsel.lucas@sadekya.com
Sadekya Fiduciary Partners.
Rudsel. J. Lucas TEP, Managing Director
The Triangle Office Building, Hoogstraat 20-22
P.O. Box 4750
Curacao, Netherlands Antilles
Telephone: 599 9 4652698
rudsel.lucas@sadekya.com
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