Legal Instruments of Foundations

Legal Instruments of Foundations

Copyright Date: 1958
Published by: Russell Sage Foundation
Pages: 320
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  • Book Info
    Legal Instruments of Foundations
    Book Description:

    This study contains fifty-eight documents from forty-nine different foundations, selected to represent a wide variety of these organizations. Included are documents from at least one perpetuity, dissolving fund, discretionary perpetuity; at least one company-sponsored foundation, family foundation, foundation engaged in unrelated business activities, association of foundations, "captive" foundation; at least one research foundation, special-purpose foundation, community trust scholarship fund. Several documents have been included for historical interest; documents of two foreign foundations for their comparison values. A final chapter introduces certain operational documents: grant notification form, agreement with consultants, outline for grant applicants, publication agreement.

    eISBN: 978-1-61044-011-0
    Subjects: Sociology, Business

Table of Contents

  1. Front Matter
    (pp. 1-2)
  2. Table of Contents
    (pp. 3-10)
  3. Preface
    (pp. 11-22)
    F. Emerson Andrews
  4. CHAPTER 1 Acts of Congress
    (pp. 23-43)

    SOME of the earliest foundation, were set up by special acts of Congress. Examples include the Smithsonian Institution in 1846, an operating foundation that is in some respects a ward of the United States government; the General Education Board, a Rockefeller benefaction set up in 1903; the Carnegie Institution of Washington, incorporated under District of Columbia laws in 1902 but two years later incorporated by an act of Congress; and The Carnegie Foundation for the Advancement of Teaching, first incorporated in New York State as simply The Carnegie Foundation in 1905, but receiving a broader charter and a revised name...

  5. CHAPTER 2 Acts of State Legislatures
    (pp. 44-55)

    IN THE FIRST TWO DECADES of this century foundations were still a new type of organization, not numerous, and likely to be large. A number of them were incorporated by special acts of the legislatures of the states within which they were domiciled. The act was usually a brief charter, indicating general purpose and underlying powers, but leaving to a later constitution or by-laws the spelling out of organizational structure.

    As nonprofit corporations grew in number, the states began to set up regular procedures for their organization under not-for-profit or membership corporation laws. Incorporation under these procedures is a relatively...

  6. CHAPTER 3 Wills
    (pp. 56-82)

    IN RECENT YEARS a foundation is likely to be set up by a living donor with a small initial gift, followed by a series of annual donations. Perhaps a final amount is added by the donor’s will, but the legal framework has been established, and the will simply adds to corpus; though if the amount is considerable, some new provisions may affect the functioning and legal structure of the already existing foundation.

    A will must, of course, comply with the requirements of the statute of wills of the particular state in which the donor is domiciled. These requirements are often...

  7. CHAPTER 4 Trust Instruments
    (pp. 83-148)

    IN LAW, a trust is a fiduciary relationship in which one person holds property under a duty to deal with it for the benefit of another. In private trusts, the beneficiaries must be specified persons. In charitable trusts, the beneficiaries are usually persons not specifically named but belonging to a group or class; the purposes must be beneficial to the community; and the trust may be perpetual. Charitable trusts are the oldest form of philanthropic endowment, long antedating the use of the corporate device. In England, the term “charitable trusts” is still used as embracing all philanthropic endowment. In the...

  8. CHAPTER 5 Corporate Resolutions
    (pp. 149-150)

    WHEN a business corporation desires to set up a foundation, in the form of trust or corporation, to serve as a depository for charitable funds and the chief (sometimes the sole) channel for their distribution, an initiating resolution by the Board of Directors is customary. Two examples follow.

    [The Resolution of the United States Steel Corporation is brief, the details having been carried in the certificate of incorporation¹, presented at the same meeting.]

    Resolved: That the formation of a charitable non-stock and nonprofit corporate foundation under the laws of the State of Delaware to be known as United States Steel...

  9. CHAPTER 6 Certificates of Incorporation
    (pp. 151-187)

    THE USUAL FRAMEWORK for foundations in recent years has been incorporation under the laws of a state or territory. As compared with the trust, the incorporated foundation is somewhat more difficult to initiate and requires continuing attention, but it is a more flexible instrument. Within the traditionally broad limitations of charter or certificate of incorporation, it can subsidize or undertake operations of the widest variety by simple action of its board of directors, or trustees, as they usually style themselves.

    The laws creating and regulating nonprofit corporations differ in the various jurisdictions, with the result that some foundations are incorporated...

  10. CHAPTER 7 Constitutions
    (pp. 188-208)

    ACCORDING TO WEBSTER, a constitution is “the fundamental organic law or principles of government of a nation, state, society, or other organized body of men, embodied in written documents … laying down fundamental rules and principles for the conduct of affairs.”

    Most modern foundations have their fundamental organic law spelled out in their articles of incorporation; they need less rigidity than the wordconstitutionimplies in their secondary legal instrument, which is usually a set of by-laws which can be amended without too much difficulty as need arises.

    Only a few foundations, therefore, possess a document with the formal title...

  11. CHAPTER 8 By-Laws
    (pp. 209-254)

    THE BY-LAWS regulate both an organization’s internal affairs and its dealings with others. The by-laws should cover at least such subjects as membership in the corporation; number, election, term of office, and general powers of trustees; dates and procedures for regular and special meetings, quorums, voting by proxy; officers, their election, terms, and duties; executive and other special committees; how the organization's finances shall be handled; and a provision for amendment of the by-laws.

    The laws of a particular state may make special provisions necessary; for example, in New York State special regulations concerning the sale or mortgage of real...

  12. CHAPTER 9 Letters of Gift
    (pp. 255-277)

    IN LEGALLY BINDING DOCUMENTS such as charters, trust instruments, and articles of incorporation, current thinking leans heavily toward a broad statement of purposes and powers, so that adjustments can be made without court action if the presently desired program becomes less desirable or impracticable. Where a statement of specific immediate purposes or limiting conditions is desired, it may be presented in nonbinding language in a letter of gift. Few trustees or directors would violate wishes so expressed, and in the event of court action, such a document would have great weight in determining a donor’s intent.

    But also a letter...

  13. CHAPTER 10 Other Documents
    (pp. 278-292)

    THE NINE PRECEDING CHAPTERS contain legal instruments relating to the initiation or organizational structure of foundations. This chapter pertains to operation. Only four documents are included, each covering a different operational procedure. None of these is offered as ideal, to be slavishly copied. Each has grown out of wide experience in the foundation presenting the document, covers aspects of the problem the unwary might overlook, and is worth careful study.

    First is The Field Foundation’s suggestions to grant applicants as to the form their application should take, the points it should cover, and the kinds of grants not within its...

  14. APPENDIX A. Selected Bibliography
    (pp. 295-300)
  15. APPENDIX B. Forms
    (pp. 301-310)
  16. INDEX
    (pp. 311-318)