Today, there are a large number of organizations whose activities are aimed at solving problems of vulnerable categories of the population free of charge. How do charitable foundations work ? Where do they get the money from and on what basis do they help? How do they interact with the state and what obligations do they have? We will talk about everything in detail below.
History of Charity
The first facts of charity existed several millennia ago. Churches and monasteries acted as patrons, providing poor families with food and clothing. Also, a tithe system was in place in some countries — a form of donation to temples and clergy. These funds were then distributed among the poor in a particular region.
A new stage dates back to the 15th century. In 1741, the English merchant T. Coram founded the so-called Foundling Hospital. And in Russia, Ivan the Terrible gave an order to provide the poor with the necessary livelihoods at the expense of the state treasury.
But in general, state institutions have not been particularly successful in this field. At the same time, in the West, charity has somewhat changed its forms. An American industrialist and philanthropist E. Carnegie made a proposal that appealed to many other countries. He criticized charity in the classical sense. He believed that it was unreasonable to provide targeted financial assistance to the poor, but instead called for rooting out poverty.
Carnegie himself showed an example of altered charity: now all donations and funds for help were sent to libraries, museums and other similar institutions. And the poor only gave the opportunity to visit these places.
New stage
Despite the antiquity of this phenomenon, accurate historical data on the first charitable organization does not exist. In general, history shows that the development of charity originates simultaneously in almost all corners of the Earth.
But the foundation of the E. Ford Foundation, which owned more than $ 1 million in funds, was a new stage in the development of philanthropy as such. That was in 1936. E. Ford for this purpose used the funds of his father, the monopolist of the automobile industry of those times, Henry Ford. It was an international fund. He provided assistance to many countries. In particular, special attention was paid to the fight against HIV.
Kinds
In order to understand how charitable foundations work, it is necessary to determine belonging to a particular species. Today there is the following classification:
- Private foundations - founders are private individuals. Funds are formed on the basis of 1/3, where a third is provided by the state, the rest - by a private person. The founder himself has the right to manage the fund.
- Nonprofit organizations are created by enterprises or individuals. Management is carried out by the board of trustees. They decide who and how much to allocate. Also, a non-profit charitable foundation may be founded by a group of enterprises. In this case, they must pool their funds.
- Commercial funds. Despite the name, such organizations themselves do not conduct commercial activities. The main activity is the holding of various events and exhibitions that bring funds. The funds received are directed to the needs of citizens who apply to them.
- Public funds are organized by combining several companies or individuals engaged in different types of activities.
- Operational funds choose a specific problem and devote their activity to its solution. The problem is solved by introducing large-scale, long-term projects covering a wide range of people. For example, programs can be aimed at eliminating unemployment or educationally.
- Non-operational funds are committed to allocate funds for the operation of operational funds.
How to open a charity fund?
When an entrepreneur reaches certain heights in his field, he often decides to provide large-scale, systematic material assistance and open his organization in this direction. But in order to successfully implement the plan, it is necessary to understand how charitable foundations work.
One of the important conditions is an understanding of how any organization generally operates. The principles of organizing a charity fund are similar to managing a regular commercial company. From this point of view, the organization of a charity fund has the same algorithm as when creating a new product or brand.
Administrative planning
In order to start a fund, you need to consider the following points:
- Name of the organization. The name of any new organization must be unique. In addition, it should clearly reflect what the company is doing. If there is no way to do this through the name, then it is necessary to think over a slogan by which any person can immediately understand the purpose of the organization.
- Preparation of a package of documents. The list of required documents for registration depends on the type of organization. Some are engaged in direct fundraising, others choose commercial activities.
- Registration. If the entire list of documents is provided and they are genuine, then registration does not take much time. In Russia, this period is from 1 week to 1 month maximum.
- Rental of premises. It all depends on the number of employees and financial capabilities. Everyone wants to get the best option, but in the interior it is better to adhere to calm and modest decisions.
- Recruitment staff. The necessary staff should include a manager, accountant, marketer, visitor specialist, etc.
- Marketing. The organization must make itself known so that people can contact it.
- Strategic planning helps to draw up a plan for a period of 1 year to 5 years. It should address financing issues, crisis plans and the development vector of the fund.
- Actually the activity itself - when all of the above is ready, we can assume that the organization of the charitable foundation has come to an end and it is time to start the activity.
Tax aspect
Along with business entities, charitable foundations are also required to pay taxes and report to regulatory authorities. The main types of reports are as follows:
- Balance sheet.
- Tax reports depending on the chosen tax system. Usually there are two types: OSNO - general system and USN - simplified system.
- Insurance Contributions Report.
- Statistical reports.
In addition, charitable foundations are also taxed. They can choose one of the following types:
- Income tax is a share of the income received minus all expenses.
- Unified social tax - almost all such organizations pay. The exceptions are funds aimed at education or science.
- VAT - rarely refers to charitable organizations. But, depending on the way the organization generates income, it can be applied. Directly providing financial assistance to those in need there is no reason to pay this tax.
Administrative issues
According to Russian law, the launch of legal entities is subject to a single algorithm, whether it is a non-profit organization, a charity fund or a typical company. It consists of the following steps:
- Registration in the Ministry of Justice. To do this, you need to collect a package of necessary documents (passports of the founders and the protocol of the decision on the establishment of the fund) and contact the local branch of the register.
- After receiving a registration certificate, you should register with the tax authorities at the location of the organization.
- Opening bank accounts for an organization.
- Appointment of the head and his deputy.
- Appointment of the board of trustees and its chairman.
- Recruitment of other employees and distribution of duties.
- Starting an organization.
- Launch marketing campaigns.
Ways to make money
A logical question arises: how do charitable foundations work if their main activity is aimed at allocating resources rather than earning? The issue of the source of funds must be resolved before the organization is registered.
In practice, it often happens that some funds are actually created to raise funds for their own interests. They begin their activities as ordinary charitable organizations, hold events, declare themselves loudly, enter the trust of the public, collect solid funds and close.
The law does not prohibit charitable companies from conducting commercial activities, earning funds and use some of them for their own purposes. This part should not exceed 20%. These funds are usually used to cover recurring expenses, such as renting premises, employee salaries, transportation and other expenses.
Common sources of funding for a charitable foundation are other commercial organizations and philanthropists. But in order for them to start cooperating with the new fund, the latter must convince them of their honesty and transparency of work. This may take some time. One such organization in Russia is the Alyosha Foundation.
Charity Fund "Alyosha"
Alyosha Foundation was founded in 2009. The main activity is helping children with serious illnesses to raise funds for treatment. On their website you can see photos of children who need to raise funds. The required amount and the amount of funds already collected are also indicated there.
Too many organizations collaborate with this fund by regularly transferring money. However, on the Internet, there are also statements by people who doubt the transparency of the fund. If for someone the question of how to apply to a charity fund is relevant, then the site has their phone number and email address. If you are a philanthropist and you are interested in the fate of the transferred money, then you have the right to demand a report on the distribution of funds from any fund. Funds usually provide it without difficulty.
How to promote a new fund?
In any society, there are always social problems. Social bias organizations must be able to solve these problems. If you managed to create non-standard methods or systems, the chances for the foundation to flourish immediately increase.
The first step is to open a fund, the second is the search for funds. Where to get money for a charity fund, in particular, for its promotion? After all, marketing and advertising services are not cheap.
In this regard, a standard method of work will be useful - raising funds from large organizations and wealthy individuals. Among them there are those who spend millions of dollars on donations. But they also have their own interests - so that the public knows about it. Therefore, most charitable foundations include marketing and advertising costs in the amount of the fee. As a result, you can get a mutually beneficial exchange: for the needy - money, for patrons - public recognition, loyalty and improving the image.
What is the most important thing?
How to develop a charitable foundation so that everyone in need gets the necessary help, and money goes easily? Each founder asks this question. Given the specifics of the activities, we can say that the success of the organization depends entirely on employees. They must clearly understand the vector of their activities, especially the work with their audience, whether it be wards or sponsors.
Employees are required to be able to solve non-standard tasks: to be able to negotiate with the most unexpected people, organize effective events and the ability to stable interaction with various sectors of society.
There is an opinion that in the non-profit sector they pay little. Overall, this is close to the truth. But if the fund decides to adequately pay for this hard work, then it will increase the chances of development, as it creates the possibility of hiring highly qualified personnel.