Creating a private foundation

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Private philanthropy has been an integral part of Canada’s legacy to the charitable community. A philanthropist who wishes to strategically organize his or her charitable giving has many options. This article explores one of them: the private foundation.

A charitable foundation is an entity that is constituted and operated exclusively for charitable purposes. It may be created by trust or incorporation. A charitable foundation generally fulfills its charitable purposes through the disbursement of its assets to other qualified donees, which include other registered charities.

In general, a qualified donee includes:

• registered Canadian charities, registered Canadian amateur athletic associations;
• most Canadian universities and colleges;
• United Nations or a UN agency;
• some foreign universities, foreign charitable organizations to which the Government of Canada has made gifts to during the charity’s current taxation year or in the 12 months preceding the charity’s current taxation year;
• Canadian municipalities;
• the government of Canada;
• the government of a Canadian province; and
• a municipal or public body performing a function of government in Canada.

Read this article to learn more about how to set up a private foundation.