Published in The Times
Companies that want to make a difference in the world, while reducing their tax bills, are setting up charitable foundations, writes Sally Percy
Charitable foundations are a popular option for companies wishing to be philanthropic in a tax-efficient way. Entrepreneurs, in particular, tend to favour them when they want to channel profits from their businesses into targeted worthwhile causes.
“Foundations are being set up by individuals who have made a lot of money from their companies,” says Kate Sayer, partner of charity audit firm Sayer Vincent. “They see a foundation as a good way to give structure to their charitable giving.”
By establishing a charitable foundation and making cash donations to that foundation, a company can enjoy the same tax benefit that it would if it made donations to any other charity. In other words, it can offset its giving against corporation tax.