Foundations

<p class="default">07:08 PM, May 28, 2007&nbsp; (These are largely funders of neuroscience, etc. ; but also see Ecology NGOs)</p>

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Drew Altman, PhD Pres and CEO&nbsp;</p>

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"the recorde intent of the donor, somewhat like the US Constitution is living language.&nbsp;</p>

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Must give away 5% per year.&nbsp;</p>

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A private foundation is an organization endowed with a substantial sum of money left by a wealthy individual or family to be used for a philanthropic or charitable purpose. That purpose typically is quite broad, and the recorded intent of the donor, somewhat like the U.S. Constitution, is living language that must be interpreted by successive generations of foundation executives and trustees in light of changing circumstances and opportunities.&nbsp;

Private foundations are established to advance the philanthropic interests of the donor. But of course, establishing a private foundation is also one of several options available to wealthy persons under the tax code to protect some of their money from taxation. So that wealthy persons cannot use the establishment of a private foundation to protect their wealth from the Internal Revenue Service (IRS), the law requires that foundations annually spend an amount equal to five percent of their overall assets (at Kaiser we spend much more, about nine percent). For example, a foundation with $100 million in assets would be required to pay out $5 million per year for philanthropic purposes. If that sounds low, note that most foundations seek to maintain the real value of their assets to benefit society in perpetuity. This requires earning a return on invested assets sufficient to cover the five percent annual payout requirement, money management costs, and inflation. This is achievable over a long period of time but not easily, so the 5 percent requirement is not unreasonable&nbsp;

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