Charities vs Foundations

As I continue with both this blogging project and with the course I thought I would continue to research and learn a bit more about different aspects of this line of work.  I want to start with something that I recently learned from our course.

A little known fact is that Charities and Foundations are not in fact the same thing.  Even up until I began my course I would use terms like Charity, NGO, Non-profit interchangeably, picking and choosing which seemed appropriate.  I also tended to consider a Charity a religious based NGO.  I tended to assume that some charities just happened to call themselves foundations, not really considering that it could mean a lot more than fancy talking.
So now that your minds have been blown let me elaborate!

Charitable Organizations

Interestingly enough all charities are considered non profits but not all non profits are charities.  In addition charities offer tax receipts and only have charitable purposes.  Charities have more than 50% of their board(directors etc) at arm's length and generally tend to receive funding from donors at arm's length.  These organizations also tend to carry out their own charitable activities and events.
An example of a charitable organization would be Amnesty International

Foundations

The first and most important(in my opinion) aspect of foundations is that there are two type; Public and Private.  Both public and private foundations are established as a corporation or trust and only carry out charitable purposes.

Public foundations are similar to Charitably Organizations in that they have more than 50% of their board are at arm's length. These foundations generally give more than half of their income to other donees, which are usually registered charities. [Arm's length means that they are not related and act independently]
An example of a public foundation is The Hospital For Sick Children Foundation

Private foundations carry out their own activities as well as funding other registered charities and other donees. What is interesting about private foundations are that 50% of their board etc are NOT at arm's length from each other. In addition, more than half of their funding come from a person or group that have some sort of control of the charity or make up 50% or more of the board.
A great example of a private foundation is the Stephen Lewis Foundation


References for this blog were found at;

http://pfc.ca/canadian-foundation-facts/
http://www.cra-arc.gc.ca/chrts-gvng/chrts/pplyng/trcd-eng.html