Public Charity And Private Foundations

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Public Charity and Private Foundations

Public Charity

Introduction

The concept of charity has been part of the society and human life since the old times. The concept has existed in diverse forms amongst all the civilizations based on the religious, sociological, and cultural norms and traditions. In today's world, it is important for the legislation to demarcate the concept of charity because it was observed that some people and businesses used it for the sake of personal gains or loss of some other entity. The most common definition of charity has been derived by the Inland Revenue Services and even this definition briefs that some of the aspects of this description may also be applicable for other concepts like gifts. It explains charity as an act which relieves the poor and needy, promotes the religion, reduces the burden of the government, and encourages social welfare. The act of charity results in less tensions or problems, availability of human and civil rights, and helps in reducing the injustice, discrimination, community deterioration from the society (Smith, 2013).

The act of charity is about giving money, goods, time or even advice to unfortunate and poor people. The act is different from other normal activities of human being because the charity giver does not expect anything in return of the offer.

Description

The concept and notion of charity has changed considerably as a result of change in the political framework. In past times, the donor used to directly give away the charity to the needy person. Contrary to this, a person today has the option of either giving charity directly or through an intermediary. These intermediaries are known and recognized as the charitable organizations. There are three types of charitable organizations which includes public charity, private organization, and special issue in which some community foundation or funds on the direction of donor is established.

Public Charity

The concept of public charity is described as an organization or body whose charity collection comes from the general public at large rather than a small group of donors. To determine this difference, the general criterion is to track the source of the findings. If more than one third of the funds come from the general public than the non profit organization is recognized and accepted as a public charity. There is also restriction about the amount an individual should contribute to check the public support test.

Organizations can also apply for the status of public charity on the basis of the mission related revenue test (Norton, 2012). The groups that use this test, stresses on the fact that the revenue earned by them is through the sale or fees in the quest of some type of charitable purpose. Museums and some health services are the examples of the organizations that generate revenue from some charitable resource or for some generous purpose. The companies that fall in this category should that their support, contribution, and revenue comes from the common people and governmental bodies.

A special category in the identification of charitable organizations includes the clause of ...
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