Understanding the Canadian Foundation Structure
There are three types of charities operating in Canada as defined by the Income Tax Act: private foundations, public foundations, and charitable organizations.
Private foundations are mostly handled by a single donor or an entire family, wherein the final decision rests upon the said donor or family. A public foundation on the other hand is governed by a board, where decisions must be voted by its members, and a consensus must be reached. Charities are much different form the other two because they are recognized as having a particular set of goals with which to attain. Charitable purposes can include promotion of education, poverty relief, and many more that can be deemed beneficial to the community.
Under public foundations three types can again be found: community foundations, grantmaking foundations, and donor-advised foundations.
Community foundations focus on charitable activities that improve a certain community. A community foundation limits its scope to a certain area, and are almost always governed by those who are within the targeted area. Grantmaking foundations are those that lend support to institutions such as universities and hospitals. Meanwhile, donor-advised foundations function similarly to community foundations but also handle donor-designated funds which can be released according to the donor’s wishes.