The goal of the foundation’s activity should be socially or economically useful. So what?
1. Purpose of the foundation
The purpose for which we can establish a foundation is not arbitrary – according to Art. 1 of the Act on Foundations – should be socially or economically useful, in line with the basic interests of the Republic of Poland, in particular such as: health protection, economic development and science, education and upbringing, culture and art, social care and assistance, environmental protection and the care of monuments . The expression “in particular” means that the purposes mentioned in the Act, and the above-mentioned purposes, are given only by way of example. In practice, this means that the foundation may pursue any charitable or social or economically useful goals, provided, however, that they are of a public nature.
Sometimes it may seem that the purpose for which we would like to establish a foundation is most useful, e.g. financial aid in the form of a long-term scholarship for an orphaned child. However, the purpose stated above is not public. Therefore, it is important to remember when defining the scope of the organization’s activities that the foundation should not be created to satisfy the private, personal good of the founder or any other person, but for the general good.
A characteristic feature of a foundation is the non-profitability of the purpose for which it was established.
When starting to define the purpose or goals of the foundation, it should be remembered that they are given in the foundation act and in the statute. At the stage of establishing the foundation, the goals stated in the foundation act and in the statute must be exactly the same. In addition, it is important that the wording affects, inter alia, on the possibility of receiving subsidies, taking advantage of tax exemptions, accepting donations.
Detailed description of goals
Goals should be broadly defined, and at the same time as specific and understandable as possible. Thanks to this, the person reading them can easily imagine what the organization wants to achieve and in which directions to act. Sometimes it happens that the statute includes goals taken directly from the catalog of goals presented in Art. 4 of the Act on Public Benefit and Volunteer Work. This does not mean, however, that it is necessary to use the literal wording of the act.
You have to keep the so-called the Golden mean. Write broadly, so as not to change the statute every year, but be specific. If we only focus on one or two goals at first, nothing bad will happen, no one will be able to question it.
Objectives set out in the statute, and income tax exemption
The Foundation, as a legal entity, is subject to tax obligations. One of such obligations is the obligation to pay income tax, which results from the act on corporate income tax. The same act also contains provisions on tax exemption (Article 17 (1) (4)) – the foundation may take advantage of these exemptions if the statutory goal of the foundation is to operate:
- scientific, scientific and technical,
- educational, including educating students,
and activities in the field of:
- physical culture and sport,
- environmental protection,
- supporting social initiatives for the construction of roads and telecommunications networks in the countryside and water supply to the countryside,
- health protection and social assistance,
- vocational and social rehabilitation of the disabled and
- religious worship.
In practice, this means that the funds obtained by the foundation will be subject to tax exemption (income will be exempt from income tax) if they are intended for purposes and activities that are included in the above-mentioned areas, which are the statutory goals of the foundation (i.e. resulting from the provisions of the statute).
Objectives set out in the statute and donations
It is also important for the foundation to be able to receive support in the form of donations, both by individuals and companies. People who want to support activities in this way, e.g. cultural or charitable activities of a selected foundation, can benefit from a tax deduction. This possibility is provided by the Personal Income Tax Act and the Corporate Income Tax Act. The donation will be tax deductible if it is transferred by bank transfer, for the purpose of implementing the statutory goals of the foundation included in the catalog of goals listed in Art. 4 of the Act on Public Benefit and Volunteer Work.
These objectives partially overlap with those mentioned earlier in connection with the income tax exemption. This is for example:
- social assistance,
- charity work,
- health protection and promotion,
- science, education, education and upbringing,
- culture art protection of cultural goods and traditions,
- promotion of physical culture and sport,
- ecology and protection of animals and protection of natural heritage.
Objectives set out in the statute and subsidies
Organizational activities often take the form of projects. Projects respond to some needs or problems that we see around us. After the foundation is established, it can look for money to implement these projects from various sponsors, e.g. companies, corporate foundations, local governments. One of the forms of support for the foundation or its specific activities will be granting it a subsidy. And the one who supports (whether it is a local government or a “private” sponsor) will check whether the activities planned by the organization comply with its statute. If this is not the case, the organization’s application may be rejected for formal reasons.
Non-profitability of the goal
The purpose of the foundation may not be of a profit-making nature, i.e. the purpose of the foundation may not be to raise funds for operations or running a business.
This does not preclude the foundation from running a business. However, it will be described in another part of the statute (not in the part containing the goals and means of implementation, but preferably in a separate paragraph) and will require an entry in the Register of Entrepreneurs in the National Court Register.