A draft law “On Private Foundations” has been developed in our country to promote professional property management for owners and entrepreneurs and to enhance the culture of inheritance.Based on international practice, this document presents an innovative mechanism that combines the distinctive features of personal and private foundations.
A personal foundation is a guarantee of property and philanthropy
Under the new draft law, a personal foundation is a non-governmental non-profit organization established by an individual during their lifetime or after death in accordance with their will.
- Purpose: to manage the assets accumulated by the founder under the terms set by them, and to sustainably implement social, cultural, educational, and charitable projects.
- Sustainability: thanks to a professional management system, the business and charitable model created by the founder will not stall for many years and will continue to grow.
Structure of the law and key provisions
The document consists of 8 chapters and 49 articles and covers all aspects of a foundation’s activities:
- Beneficiaries: it clearly specifies who receives the foundation’s funds and under what procedure (as socio-economic assistance or in the form of property). They areprimary beneficiaries(specific individuals) andordinary beneficiaries(a group of persons).
- Founding documents: the foundation’s “Constitution,” theCharter, is registered with the justice authorities. In addition,Management termsare drawn up to regulate asset disposal and the relationships among governing bodies.
Management and oversight mechanisms
To manage the foundation’s assets effectively, the founder has a wide range of options:
- Day-to-day management: carried out by a sole or collective (collegial) body.
- Oversight: the foundation may establish a supreme collegial body, a board of trustees, or a separate oversight structure.
- Veto right: the founder will have the right to prohibit (veto) any decision or action that contradicts the foundation’s interests.
What does it provide?
Introducing this innovative mechanism will enable citizens to ensure that their property is used according to their wishes not only today but also in the future. This is especially important for organizing major charitable projects and transferring family capital flawlessly from generation to generation.
The new system is expected to become a strong economic lever supporting “human capital” in urban environments and public life.
In your opinion, how much can the establishment of personal foundations transform the culture of patronage and charity in our country?
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