Private and community foundations in the USA benefit from a favorable tax treatment, at the same time being subjected to specific forms of regulation aimed at guaranteeing that they operate in the public interest. This paper investigates to what extent the different fiscal rules applying to community and private foundations – the ‘public support test’ and the ‘minimum payout requirement’, respectively – influence their behavior. Using tax return data for the USA in the period 2000-2006, we show that the grant-making activities of the two types of foundations do not appear to be systematically influenced by the tax-regulation. Nonetheless, the amount of grants paid by the largest among the community foundations is strongly correlated to the donations received (consistently with the design of the ‘public support test’), while the amount of grants paid by the largest private foundations is correlated to their endowments (consistently with the design of the ‘minimum payout requirement’). More generally, our results point to the existence of a large heterogeneity in the grantmaking behavior of both community and private foundations, suggesting that an effective regulatory approach could benefit from a careful analysis of the nature and of the institutional features of the foundations under scrutiny.
|Numero di pagine||51|
|Stato di pubblicazione||Pubblicato - 2012|