What Is an Endowment Trust?

Charitable trusts are the symmetry of "private trusts". Trusts for academic, technical, charitable, religious and other public welfare undertakings also refer to the trust business of public welfare undertakings that individuals entrust to the trust department with their own funds. The beneficiaries in such trusts are people or groups in the public who meet certain conditions. Financial trust institutions must implement the following principles in the management of public welfare trusts: The distribution of income and property shall strictly follow the wishes of the donor and shall not be used for other affairs at will; the use of trust funds shall be guaranteed for social public welfare undertakings; large and small donations shall be managed on an equal basis Principles; proper use of trust funds for the benefit of beneficiaries; the use and distribution of trust funds should be announced regularly. ^[1]

Public trust

Charity trusts have the lowest cost

Charitable trusts originated in the United Kingdom and began to appear in the Middle Ages. They were used for charitable giving.

Zhang Gaorong, director of the Research Department of the China Philanthropy Research Institute, said that the trust is simply to be entrusted to manage the property on its behalf.

Charitable trusts are trusts established for the benefit of the whole society or a significant part of the public.

On April 25, 2014, Alibaba's two founders, Ma Yun and Cai Chongxin, announced that they would establish a personal charitable trust.

The fund comes from the options they own in Alibaba Group, and the overall size is 2% of the total share capital of Alibaba Group.

For detailed information about the fund, Alibaba staff said that the fund was a personal act of Jack Ma, and the information they knew also came from Jack Ma's public information.

"Under the current legal framework, Jack Ma establishes a charity trust, and it is much better to donate funds to the trust company than to donate directly to the foundation," said Shang Guan Liqing, founder of Changan Trust's Charity Trust Department. The donation of equity to the foundation will inevitably involve the link of asset evaluation. In this process, Jack Ma needs to pay a one-time payment or gradually pay income tax for 5 years on the value-added portion of the stock.

According to the market valuation of Alibaba Group after its listing in the United States, the fund size is between 2 billion and 4 billion U.S. dollars, and even if it only pays 12% corporate income tax, Jack Ma has to pay nearly 3 billion yuan in taxes.

In addition, if Ma Yun sets up a non-public foundation with 2% options,

1. The purpose must be solely for the public good.

2. The beneficiaries are not completely determined.

3. Public welfare