If the recent example of the funding relationship, and subsequent cancellation of the funding contract between WE Charity and the Canadian Federal government has showcased anything; it laid bare what most philanthropists and charity directors have known for decades – the Canadian charitable system is broken.
A private foundation is more than just an entity that allows you to make donations to qualified donees. It is a legal structure and an operating corporation. Having a formal structure around your giving, like a private foundation, is just like having a business. The motivations for setting up these types of organizations range from purely altruistic to more technical as part of a tax planning solution. When looking at it from an altruistic perspective, it might be established as a tool to bring family members together, an entity to strengthen a corporate or family brand in a community or a financing solution to a complex social problem. This blog post explores the pitfalls of private foundations.