What Is a Family Foundation?

A foundation (charity foundation) refers to a non-profit legal person established in accordance with the provisions of these regulations by using property donated by natural persons, legal persons or other organizations for the purpose of engaging in public welfare undertakings.

foundation

The foundation's mature development was first in the United States. The American Foundation began to flourish after the 20th century. 1900 Carnegie Foundation and

Characteristics of the Foundation

As a basic social organization and institutional form, foundations are different from governments and enterprises, and different from general non-profit organizations. Public welfare, non-profit, non-governmental, and fund trust are the basic characteristics of foundations.

1.Public interest

The public welfare of the foundation is concentrated in three aspects: one is that the foundation originates from donations and is an institutionalized and organized form of public welfare donations; the second is that the foundation has a clear purpose for public welfare; the third is that the foundation has a clear purpose for public welfare Benefit specific groups and society as a whole through various project activities. The non-profit nature determines that the foundation is essentially a social non-profit organization.

2. Non-profit

The non-profit nature is reflected in the operation and management of the foundation and its corresponding system specifications, which is manifested in three aspects: First, there is a non-profit distribution and income constraint mechanism, which requires that the foundation's donors and actual trustees are not allowed to obtain funds from the fund. Benefit from the property and operation of the Association; second, there is a non-profit organization operation and management mechanism, which requires the foundation to have a self-control mechanism that effectively avoids higher risks and higher returns; third, there is a non-profit property preservation mechanism, The foundation is required not to alter the structure of property and property rights in other ways than donations.

3. Non-governmental

The non-governmental nature of foundations is the main characteristic that distinguishes them from government, which is manifested in three aspects: first, the foundation is different from the government in the decision-making system, and is an independent legal person with autonomous decision-making and autonomy; second, the foundation's governance structure Different from the government, it is a democratic governance and an open social organization. Third, the foundation is different from the government in its operating mechanism and is an organization that pursues core competitiveness and survives the fittest in the market.

4. Fund trust

A foundation is a collection of commonweal property that is formed on the basis of donations. It is a commonweal property that exists in the form of a fund. It has two meanings: First, the foundation is essentially a trust relationship, and it is a donor, trustee, and beneficiary. The public trust established between the public welfare properties has a good credibility as its core value. The second is that the foundation is a collection of properties that exist in the form of public welfare properties. The effective maintenance and appreciation of value are the manifestation of its vitality.

Foundation functions

First, social benefits that can be used on a large scale are gathered in a voluntary manner. According to incomplete statistics, by the end of the 20th century, the total fund assets of the United States were 480 billion US dollars, and the funds provided to the society were as high as 30 billion US dollars each year, and the number of foundations was as high as 56,000. In incomplete statistics, there are as many as 100,000 funds in European countries, and a large number of foundations in the majority of developing countries.

Second, the foundation's purpose is to serve the future of all mankind. In order to realize a better society, the foundation needs to think about itself and realize an innovation of its own development.

Third, the foundation is a legal person-based system model, and the funds it can raise are higher than other non-profit institutions, which makes modern foundations have the ability to adapt to new social needs and the changing needs of the times.

Fourth, foundations are developed by civil society

Foundation Management Regulations

(Adopted at the 39th Executive Meeting of the State Council on February 11, 2004, effective June 1, 2004)

Article 36 Foundations and representative offices of overseas foundations shall submit the previous year's work report to the registration management organs before March 31 of each year, and accept the annual inspection. The annual work report shall be reviewed and approved by the competent business unit before being submitted to the registration and management authority.

The annual work report shall include: financial accounting reports, audit reports of certified public accountants, the activities of fundraising, accepting donations, providing financial assistance, and changes in personnel and institutions.

Article 38. After passing the annual inspection of the registration management organ, the foundation and representative organizations of overseas foundations shall publish the annual work report on the media designated by the registration management organ, and accept the inquiry and supervision of the public.

Article 42 If a foundation, a branch of a foundation, a representative office of a foundation, or a representative office of a foreign foundation has any of the following circumstances, the registration management authority shall give a warning and order it to stop its activities; if the circumstances are serious, the registration may be cancelled:

(6) Failure to perform the obligation of information disclosure or to disclose false information.

"Foundation Information Disclosure Measures"

(Adopted at the 6th Ministerial Conference of the Ministry of Civil Affairs on December 27, 2005, effective from January 12, 2006)

Article 3 The information published by the obligor for information disclosure shall be true, accurate and complete, and there shall be no false records, misleading statements or major omissions.

The information disclosure obligor shall ensure that the donor and the public can quickly and easily consult or copy the information published. Article 5 The obligor for information disclosure shall submit the annual work report of the previous year to the registration management organ before March 31 of each year. Within 30 days after the registration management authority has passed the examination, the obligor for information disclosure shall, in accordance with the unified format requirements, publish the full text and summary of the annual work report on the media designated by the registration management authority.

The financial and accounting report of the information disclosure obligor shall not be released to the public without auditing.

"Several Provisions Regulating the Behavior of Foundations (Trial)"

(6) The foundation shall publicize the following information to the public in a timely manner:

Promoter

2. The main donor;

3. The main source unit of the foundation directors;

4. The investee invested by the foundation;

5. Other individuals or organizations that have control, joint control or significant influence with the foundation;

6. Transactions between the Foundation and the aforementioned individuals or organizations.

"Guidelines for Disclosure of Charitable Donation Information"

(Consultation Draft)

Chapter III Information Disclosure

Article 10 Information on the organization that accepts the donation, including the name of the organization, the basic information of the organization (annual inspection status, public or non-public offering qualifications, evaluation results, establishment time), the purpose and business scope of the organization, office address, work phone, contact person for handling complaints, Contact information, etc.

Article 14 Institutional financial information includes annual financial accounting reports (accounting statements, balance sheets, business activity statements, cash flow statements, notes to accounting statements, financial statements), audit reports, etc.

Regulations of the People's Republic of China on Disclosure of Government Information

Article 1 These Regulations are formulated in order to ensure that citizens, legal persons and other organizations obtain government information in accordance with the law, increase the transparency of government work, promote administration in accordance with the law, and give full play to the service role of government information in the production, life, and economic and social activities of the people.

Article 9 Administrative agencies shall actively disclose government information that meets one of the following basic requirements:

(1) involving the vital interests of citizens, legal persons or other organizations;

(2) Those that need to be widely known or participated by the public;

(3) reflecting the establishment, functions, and procedures of the administrative organ;

(4) Others shall be actively disclosed in accordance with laws, regulations and relevant state regulations.

Fundamentals

Since the number of non-public foundations exceeded that of public foundations in 2010, the number of non-public foundations has been increasing rapidly. The main reason for the rapid increase in the number of non-public foundations lies in the following aspects: policy promotion, the "Regulations on Foundation Management" clearly define the status and basic operating rules of non-public foundations, and the decentralization of non-public foundations registration management authority has been further promoted in recent years The increase in the number of non-public fundraising foundations; the society has more understanding and concern about the charity industry since 2008; the implementation of the "Corporate Income Tax Law" since January 1, 2008 has increased the tax exemption rate of charitable donations for enterprises Wait.

According to statistics from the Foundation Center Network, in 2014, there were 4,117 foundations nationwide, an increase of 568 over the previous year, an increase of 16.0%, of which: 1470 publicly-funded foundations, 2610 non-public-funded foundations, and foreign-related foundations9 , 28 overseas foundation representative organizations. There are 227 foundations (including foreign-related foundations) registered by the Ministry of Civil Affairs. Public and non-public foundations received a total of 37.43 billion yuan in donations from all walks of life. Thirteen administrative penalties were imposed on the foundation throughout the year, and one was banned. ^[2] In 2014, the total donation income of the top 10 foundations in donation income was 8.213 billion yuan, accounting for 23.94% of the total donation income of foundations nationwide. Among them, the first in donation income is the China Cancer Foundation, which has a donation income of 21,309,200 yuan, followed by the Tsinghua University Education Foundation, which has a donation income of 1,489.7 million yuan. For very few foundations, in addition to donation income, other income may also dominate. This is related to the immature development of the domestic foundation industry, and also to the areas that the foundation is concerned about. For example, children's assistance and poverty alleviation are more likely to attract public attention, while cultural and artistic or research foundations may be relatively difficult to raise funds.

From the perspective of quantity and distribution, the development of foundations shows the following trends:

1. The number of foundations has maintained a growth rate of about 20% since 2004;

2. Development trend in the field of activity: stand out and be diversified overall;

3. The number of foundations in 7 provinces and cities accounts for 61% of the national total. ^[3]

National Foundation Development Trend Analysis · 2013 Edition

In terms of geographical distribution, the number of foundations is closely related to the level of local economic development, and more foundations are distributed in the more economically developed eastern coastal areas. As of May 12, 2016, of the 4,931 foundations in the country, the number of foundations located in Guangdong Province was the largest, reaching 689, accounting for 13.97% of the national total, followed by Beijing with 582 foundations. In addition, more than half of the foundations are concentrated in the five provinces of Guangdong, Beijing, Jiangsu, Zhejiang, and Shanghai. These regions are also regions where the number of non-public foundations is much larger than the number of public foundations.

Foundation Focus Areas

In the United States, after hundreds of years of development, the scope of attention has been expanding. In addition to focusing on the traditional areas of poverty alleviation, education, environment, medical care, public utilities and other fields, it has also expanded to global development, spiritual and personal potential exploration. The Bill and Melinda Gates Foundation donates to global development, health, and education. The foundation of the E-bay founders Omidyars is actively supporting the exploration of personal potential. The White Foundation focuses on ancient research, art, and humanities.

As of the end of 2013, most of the activities of China's foundations have focused on education and traditional disaster relief, poverty alleviation, medical assistance, and culture, and are committed to promoting arts, environmental protection, public services, community development, and public welfare support. There are fewer foundations in the wider public domain. There are also some newly established foundations that have paid more attention to emerging areas, including national defense construction, media, and geological sciences, including the Yunnan Sanyi Culture and Defense Foundation, the Global Public Welfare Foundation, and the China Paleontology Fossil Protection Foundation.

Questioning the credibility of the foundation

In 2011, China's public welfare and charity community experienced a veritable eventful event. First, Guo Meimei's behavior of showing off riches caused a crisis of trust in the Red Cross. Then, the China Charity Federation invoice incident and China Youth Development Foundation's China-Africa Hope Project. The investment lending by the Henan Song Qingling Foundation has been questioned and criticized by the public. In the public welfare sector of "one sick, the whole family taking medicine", the constant emergence of charity scandals has affected the credibility of the entire public welfare industry.

As Xu Yongguang, the founder of Hope Project at that time and the chairman of Nandu Public Welfare Foundation, said, the domino effect of the "government-run" charitable credibility crisis triggered by Guo Meimei has emerged: "Despite the troubles and background of the four institutions, The reasons and nature are different, but the society's questioning and blame for these events, whether professional or lay, rational or irrational, all point to the transparency and credibility of the 'government-run' charity, expressing their dissatisfaction with the 'government-run' charity. Trust. The emergence of this chaos seems to be accidental, and it is in the final analysis the fault of the charitable system that separates the government and the people. "

On August 29, 2012, China Transparency Index (FTI) was released in Beijing. China Base Transparency Index, that is, the China Public Welfare Foundation Transparency Index. This is a set of evaluation systems related to the foundation's transparency standards. Its evaluation indicators include the foundation's basic information, financial information, project information, donation information, etc. A total of 60 indicators are used, and the channel and integrity of the foundation's information disclosure are used as parameters. , In the form of a leaderboard. The ranking will be updated once a week according to the latest transparency score of the foundation. The higher the ranking, the higher the transparency of the foundation. The China-Based Transparency Index is participated in the research and development by the Foundation Center Network, the Tsinghua University Integrity and Governance Research Center, the China NPO Self-Regulatory Action Committee, the China Non-Public Fund Foundation Forum and many foundation organizations. "It marks a major step for China's public welfare foundations in formulating social management standards." Said Wang Zhenyao, president of the Beijing Public Welfare Institute. According to reports, this index is open, scientific, non-governmental and international, and will promote China's public welfare foundation industry to improve the level of informatization.

The China Transparency Index establishes quantifiable transparency standards in the industry on the one hand, and shares practical experience and Internet tools on the other hand to achieve the improvement of foundation transparency and leapfrog development of foundation management capabilities. This index will help the foundation to enhance its transparency according to standards and understand the position of its information disclosure in the industry. For the public, the transparency index can be used as a reference for donation, thereby promoting the transparency and credibility of the charity industry. ^[4]

Foundation Transformation and Challenges

1. Public fundraising foundations urgently need transformation

Public fundraising foundations have the advantage of public fundraising rights, and many established public fundraising funds have expanded rapidly. However, "how to spend money well" has become the biggest problem these foundations currently face, which prompts them to think about the future positioning of the foundation. Some have begun an attempt to transform from operational to funded foundations; others have begun to create platforms to share public fundraising rights with grassroots nonprofit organizations.

In fact, since 2010, some large public fundraising foundations across the country have announced that they will shift from operational foundations to funded foundations, that is, foundations will change their own projects after raising funds to cultivate and fund grassroots nonprofit organizations.

More and more national public fundraising foundations are trying to transform funded foundations from operational foundations. However, the donors do not understand, support, and the status of grassroots public welfare organizations is not high, and the implementation of projects is difficult to predict. Makes the transformation of public funds difficult. ^[5]

2. Challenges in the development of non-public fundraising foundations

For most non-public foundations, the issue of their own sustainable funding sources has also started to attract attention. According to the "Fund Management Regulations", the annual expenditure funds of the foundation are not derived from investment returns, but from donations from enterprises and individuals. So how to ensure the benign development of the foundation itself is already a problem.

How to obtain a sustainable source of funds, adopt a variety of fund appreciation methods, and obtain safe and high returns has become an issue that cannot be bypassed in the development of Chinese non-public fundraising foundations. In fact, in some countries where foundations are developed, donating foundations is not just a donation, but an investment. Non-public foundations should use their own founding funds to make operational investments and generate benefits, so that foundations can rely on their own strength for sustainable development.