Private Foundations (aka Charity for the Rich)
In Chapter 5, I look at private foundations. Contrary to popular belief, private foundations are not a good deal for public finances in the short or the medium term. A foundation has to spend only 3.5 per cent of the value of its assets for charitable purposes each year. (This figure is 5 per cent in the United States.) Generally, foundations have no desire to spend more than their return on capital because their founders seek to conserve the initial capital. Governments thus have to wait more than twenty years to begin seeing their money. In Canada, wealth totalling more than $20 billion was tied up in private foundations in 2010, and in the United States, the figure was more than $600 billion.
BRIGITTE ALEPIN is a chartered accountant and tax specialist with a Master's Degree in Public Administration from Harvard University. She lectures on taxation and has appeared as an expert witness before parliamentary committees probing public finance. She has been a tax columnist for CA Magazine and the Journal de Montréal. She has written two previous books, one in 2010 which predicted the current fiscal crisis