A Private Foundation is a legal entity set up by an individual/s, a family or a group of individuals, for philanthropic means.
Philanthropic means: seeking to promote the welfare of others; generous and benevolent.
The sole purpose is to receive contributions for a service to the community.
A private foundation exists to sustain the participants [people that participate] and volunteers.
A foundation is categorised as a not for profit and has a wide diversity of purposes.
A foundation sustains its participants and/or volunteers by paying for food, clothing, lodging, petrol, phone and any other living & out of pocket expenses required to sustain its participants in a philanthropic manner.
Your Private Foundation will engage in benevolent activities to make the world a better place and help humanity.
* Full control of the financial affairs inside your foundation.
* A Private foundation complies with the taxation office guide as a not for profit organization with tax exempt & self assessing status, and your not required to submit returns to the taxation office.
* It is your sole choice to contract with any government bodies regarding discretionary obligation of payments as you wish.
* Purchasing products & services through the foundation currently incur GST, the foundation is really exempt from paying GST although this can sometimes be a
challenge in the world of business.
* The ability to self-regulate & keep accounting records without the involvement of the taxation office.
* Total freedom in your financial activities when running the private foundation.
Guidelines for operating a Private Foundation
The articles of association set out the general purpose & activities of the foundation. The most normal method is for the Participants, Volunteers and Contractors to provide the service to the wider community.
A private foundation is a non-government-organization and its name is not registered or trademarked, the name is best created to express the true intent and purpose of the foundation.
A Private Foundation cannot accept GST. Not being a registered ATO collector you are not able to collect GST on behalf of the taxation office.
A Private Foundation only pays GST when buying from GST registered entities. This most often can’t be avoided as this is the way a business inside the system does business.
Contributions are what your foundation will receive, as opposed to income and profit.
Meeting minutes are at the discretion of the participants of the private foundation, if & when you choose. There is no mandatory requirement’s, all record keeping is conducted at the discretion of the principal participant’s of the Private Foundation.
There may be superannuation and insurances issues to consider when operating your private foundation. Often the Principal Participant will add 9.5% to the volunteers pay in the hand to cover that and inform them that they need to arrange the super payments themselves.
BAS forms are not required for your foundation as your not registered to collect GST or maintain and submit these business records.
Your private foundation has access to full banking facilities & the principal participants.
Most accountants have very little or no knowledge of Foundations and their setups as it is not common knowledge and is not commonly taught. No accountant is required for your Foundation and caution is advised as they work for the taxation office. The majority of people operating Private Foundations use basic bookkeeping for maintaining their own personal records.
Inviting People to Participate and join your Private Foundation is at the discretion of the principal participant’s. This may all be done in in simple agreement.
Generally it is not appropriate to offer widely differing services from the one Foundation. It is best to establish a separate foundation for differing services.
The Private Foundation can start operating as soon as it is established. Any pre-existing registered business or entity is separate and can continue or cease operating at the discretion of its creators. You may have to complete the current financial reporting obligation before you have it deregistered.
Merchant facilities are available as well as all Direct Bank transfers, with Credit Card details available over the phone, some come with additional service fees.
Foundations are not used for asset protection, but some have managed to put down their foundation as the owner for a vehicle at their local transport office, this area of asset abeyance still remains a challenge for foundations. Private trusts should be explored. A Private Foundation is not a trust but fulfills on community projects to contribute to the greater community, there are no individual beneficiaries.