Foundations and Government

Foundations and Government: State and Federal Law Supervision

Copyright Date: 1965
Published by: Russell Sage Foundation
Pages: 568
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  • Book Info
    Foundations and Government
    Book Description:

    Concentrates on the historical, statutory, judicial, and administrative aspects of philanthropic foundations. It begins with a general survey of the rise of foundations, particularly as a legal concept, and examines existing provisions for state registration and supervision, with special atention to the role of the attorney general. There are field reports on ten states with programs aimed at following charitable activities closely.

    The concluding chapter provides appraisals and recommendations, and appendices include state legal requirements for charitable trusts and corporations, selected state acts, rules, reporting forms, and a list of cases.

    eISBN: 978-1-61044-222-0
    Subjects: Sociology, Business

Table of Contents

  1. Front Matter
    (pp. [i]-2)
  2. Table of Contents
    (pp. 3-8)
  3. Preface
    (pp. 9-10)
  4. CHAPTER I Foundations In Historical Perspective
    (pp. 11-53)

    The adjectives philanthropic, eleemosynary, charitable, and benevolent are commonly used to describe certain activities which have as their aim the improving or uplifting of mankind. The concept of charity existed in early cultures and has formed an important part of the entire Judeo-Christian tradition.

    Organizations to carry out the concepts of charity are to be found in early Egyptian, Greek, and Roman records. The Ptolemies endowed a library in Alexandria; Plato bequeathed funds to support his Academy after his death; and in the early centuries a.d. in Rome, private associations for relief of the poor, educational institutions, hospitals, foundling asylums,...

  5. CHAPTER II The Law of Charitable Dispositions
    (pp. 54-81)

    The functions that a foundation may perform are enumerated in the statement of purposes in its charter or deed of trust. They are governed by a body of laws which is often referred to as the law of charitable dispositions. In all but two states, this law is to be found not in statutes, but in the case law.¹

    At one time in England charitable dispositions had to conform to strict standards of public policy dictated by the Crown. Today, however, particularly in the United States, the law governing charitable purposes gives wide latitude to a donor to choose the...

  6. CHAPTER III Foundations as Trusts
    (pp. 82-111)

    Foundations are usually created in one of two distinct legal forms: trusts or corporations. Voluntary associations for charitable purposes are also recognized in law, but this form is rarely employed. The historical roots of the laws relating to charities are to be found in the law of trusts as it developed in the Courts of Chancery in England. This is a well-defined body of law, of which the law of charitable trusts forms a part.

    A trust is a device for making dispositions of property whereby the legal title and the duties of management are given to a trustee who...

  7. CHAPTER IV Foundations as Corporations
    (pp. 112-157)

    The popularity of the corporate devise for establishing charitable foundations can be attributed, in part, to the pervasiveness of the corporate form in American business life and to the familiarity of the creators of foundations with corporate operation. The corporation became popular in this country because it provided the means whereby large amounts of capital could be raised from investors whose ownership would be divorced from the responsibility of management and the liability for debt of the organization.

    The most widely quoted definition of a corporation is that of Chief Justice Marshall in the case ofTrustees of Dartmouth College...

  8. CHAPTER V The Internal Revenue Code
    (pp. 158-193)

    The influence of tax considerations on the activities, as well as the creation of charitable foundations, is amply attested to by the extensive periodical literature devoted to the tax aspects of charitable funds.¹ The grant of tax exemption to charitable entities and the allowance of tax deduction for charitable contributions represent an attitude of positive governmental encouragement of philanthropy which has been present in the American tax system since its inception. It was not until twenty years ago, however, that a rapid growth in the number and assets of charitable foundations became apparent. Congress at that time enacted the first...

  9. CHAPTER VI Agencies for State Supervision
    (pp. 194-232)

    Philanthropic activities have flourished in western democratic society in part because of an attitude of positive encouragement by the state. Despite theoretical arguments as to the extent to which foundation funds should be considered public or private, there is no dispute that the government’s interest in the efficiency and effectiveness of philanthropic operations is a paramount one. The interest of the government arises from two major sources: the interest of the state in insuring that tax privileges granted by the state are not being abused, and the position of the state as representative of the public, which is the ultimate...

  10. CHAPTER VII The Role of Attorney General
    (pp. 233-271)

    Despite the existence of a variety of sources for the supervision of foundations at the state level, described in Chapter VI, almost all of the American states accept the common law doctrine and place primary reliance on the attorney general to secure enforcement of charitable funds. In theory, this power of enforcement, derived as it is from the court’s ultimate power to redress breaches of duty and to order deviations, modifications, orcy presdispositions, is sufficient to justify this reliance.

    The range of the court actions that an attorney general may bring is broad.¹ He may request accountings, removal...

  11. CHAPTER VIII State Supervisory Programs in Action
    (pp. 272-318)

    Prior to the final promulgation of the Uniform Supervision of Trustees for Charitable Purposes Act in 1954, five states had adopted legislation designed to increase the common law enforcement duties of the attorney general by granting him power to establish an active program of supervision. The operation of these programs has varied from state to state owing in part to the language of the enabling legislation, in part to differences in the facilities available to the administrators, and in part to variations in the size and number of the charitable endeavors in the state. Each of the programs of these...

  12. CHAPTER IX The Uniform Act in Operation
    (pp. 319-351)

    Chapter viii contained a description of the programs for the supervision of charities in the six states that followed the lead of New Hampshire in adopting legislation empowering the attorney general to obtain information about the operation of certain charitable trusts and corporations, and to correct abuses in their administration. In 1954 a Uniform Supervision of Trustees for Charitable Purposes Act was adopted by the Commissioners on Uniform State Laws. It was designed to provide a model for any state wanting to adopt a program similar to those described in Chapter VIII.¹ Modified versions of the Uniform Act are in...

  13. CHAPTER X Agencies for Federal Supervision
    (pp. 352-408)

    The influence of the federal government on all charitable funds, and on foundations in particular, stems primarily from its taxing powers. Theoretically, it could have arisen through the enactment of substantive laws affecting the creation and operation of many charitable endeavors, possibly all but the very smallest, but such an extention of control has not occurred nor is this likely. Charitable activities remain creatures of the states; the laws governing their creation, their right to continuous existence, their freedom of operation, the limitations on their holdings, and the conditions for their dissolution are determined at the state level. Although at...

  14. CHAPTER XI The English Experience
    (pp. 409-427)

    The methods devised for the supervision of charitable trusts in England have taken forms different from those found in any of the American states. The Statute of Elizabeth of 1601 set the pattern for future enforcement machinery by authorizing the creation ofad hoccommissions to investigate the management of charitable trusts. The Board of Charity Commissioners, which was created in 1853 and functioned until the passage of the Charities Act of 1960, served as the primary agency for supervision. Its duties were:

    1. To inquire into the administration of charitable trusts.

    2. To compel the production of the accounts of charitable...

  15. CHAPTER XII Prospects and Recommendations
    (pp. 428-460)

    The growth of foundations in the United States and the rationale for their existence both stem from the nature of the democratic society in which they have developed. This view was well expressed by President Charles W. Eliot of Harvard in 1874 when he described the role of philanthropy in this country.

    The two nations in which endowments for public uses have long existed are the two free nations of the world. In England and the United States, the method of doing public work by means of endowments managed by private corporations has been domesticated for several centuries; and these...

    (pp. 463-490)
    (pp. 491-508)
    (pp. 509-534)
    (pp. 535-540)
  20. Index
    (pp. 541-564)