ABSTRACT
This chapter focuses on policy changes that would be aimed directly at foundation. There are several good reasons why non-profit foundations deserve more scrutiny from a public policy standpoint than either business or government. Private sector firms are established for private purposes, and although the public interest is served as private interests are served, the primary purpose of private business is to further the goals of the entrepreneurs and generate income for the owners. Even the alternative of taxing bequests into foundations does not appear attractive when we recognize that charitable contributions can be given tax-free during the donor's lifetime. The tax system currently provides an incentive for the creation of foundations, and an ideal policy would have a neutral effect, especially considering the resource allocation problems associated with foundations. Non-profit foundations exchange their tax-preferred status for an agreement to work within certain parameters that help ensure that the foundation's activities actually further the public interest.
