Question

Describe the distinguishing characteristics of a public charity and a private foundation. What examples could you use to explain the public support test and how it relates to public charities and private foundations?

Answer 1

ANSWER:-

Many organisations work for public welfare. To run these organisations, the group of people running it have to manage the funds to run the organisations. The charity which has the total public support in their favour is termed as "Public Charity". These type of charities run due to public support and public contribute for the same. They work for the safety of public. They help other charities as well. Many poor or illiterate people get help from these charity in terms of education,food,etc. It is "Non-Profit" orgabisations. The people contributing to Public Charities gets tax deductions also.

Now, the organisations which somewhere lacks in becoming Public Charity are "Private Foundation". Unlike Public Charity, they get support by Corporate or families. They get funds from them. They help other institutions from these funds. Sometimes they may not accept the donations.

As they work for public and other institutions, they should be aware about public support tests also. The organisations which get passed in these tests are declared non-profit orgabisations. So, it is neccesary to win the hearts of public and other non-profit institutions as well.