Why Your Business Should Establish a Corporate Foundation
February 21, 2020
The Corporate Foundation:
AMPLIFYING THE IMPACT OF YOUR PHILANTHROPIC INITIATIVESAs the lines continue to blur between philanthropic and corporate goals, businesses continue to look for ways to increase the impact and overall strategic value of their interactions with the communities they serve. Establishing a corporate foundation is an excellent way to amplify giving and support greater strategic objectives. In this article we’ll touch on the benefits of having a corporate foundation.
Why corporate foundations are a good ideaMore tax deductions for good deeds – Having your own corporate foundation enables you to realize deductions for charitable activities that would not be deductible through your main corporate entity. Transactions like charitable loans paid back to the foundation, grants to for-profit entities to advance the foundation or charitable causes, scholarships and even disaster relief grants, all become deductible when executed through a corporate foundation. Avoid capital gains taxes – Gifting highly appreciated assets such as land, stock and other appreciating items to the corporate foundation is a great way to support your giving efforts while sidestepping capital gains taxes. Maintain the consistency of gifts – Having a corporate foundation enables you to ensure the consistency and sustainability of your giving levels. Many companies build an endowment during profitable years to provide reserves to consistently fund initiatives during leaner years. Build your brand – Naming your corporate foundation after the company is a great way to build your company’s brand and ensure that your business is recognized for its philanthropic work. If your company name is already a respected part of the community, your name can help promote greater participation and visibility for your charitable work. Lower overhead – Foundation overhead expenses such as staffing can be paid by the foundation to reduce the overall cost to the company. Focus your giving – Establishing clear foundation emphasis areas and funding guidelines enable your company to gracefully decline funding requests that don’t support your strategic objectives. Less paperwork – Corporate foundations are not required to collect receipts from nonprofits for gifts greater than $250. That means companies that often make small donations or have a matching gift program can spend less time chasing receipts and more time serving the community.
Let Aprio help your nonprofit succeedIn 2018 alone Aprio helped more than 300 nonprofit and education clients fulfill their missions. Philanthropy is part of our DNA, and the establishment of our own employee-run corporate foundation has helped us amplify our collective philanthropic efforts to create a culture of giving. We are passionate about helping nonprofits succeed. Let us provide the guidance you need to simplify the establishment and maintenance of your nonprofit:
- Entity creation
- Bylaws and governance documentation
- Preparation and filing of IRS Form 1023 (for exempt status)
- Ongoing tax, audit and advisory services