How do foundations work?

Over 30,000 foundations are registered in our country, providing aid in various areas, including culture, sports, education, health, and human rights. How do they provide their support? Where do they get their money and what conditions must they meet to operate in accordance with the law in force in Poland? Discover the answers to the most frequently asked questions to learn the principles by which foundations operate.

Why are foundations created?

Foundations are created generally by private individuals or companies wishing to resolve a problem or actively work for an important cause. Such a goal is strictly defined in their statute and it is precisely for this purpose that the funds received from founders and donors are allocated.

For example Wellcome EU Foundation Krakow, which you will learn much more about from the suggested website, deals with providing aid to people affected by the consequences of humanitarian crises. As part of such assistance, various types of fundraisers, concerts, and cultural events are organized, as well as international exchanges and activities aimed at integrating immigrants. However, there are also many other non-governmental foundations operating in Poland that focus, for example, on helping people struggling with various types of illnesses and disabilities.

How are foundations funded?

For the vast majority of newly established foundations, the initial capital is severely limited. Necessary financial resources are obtained at a later stage, in various ways. Generally, however, they come from:

• donation from both individuals and legal entities,
• subsidies, the source of which can be, for example, enterprises or international organizations,
• business activity, which foundations can conduct to raise funds intended for the implementation of their statutory objectives,
• public collection.

Public benefit organizations can also apply for collection of 1.5% in taxes, which can provide solid support for their activities.

How do foundations set their goals?

As already mentioned, foundations exist to achieve the goals they have set for themselves. Importantly, such a goal should be:

• economically or socially useful,
• consistent with Poland's core interests, such as healthcare, education, or social assistance.

It is also worth emphasizing that The foundation's objectives should be of a public nature. and serve specific social objectives rather than generating revenue. The way they are formulated will also affect the possibility of receiving an appropriate subsidy or benefiting from tax exemptions.

What legal requirements must foundations meet?

Foundations operate primarily under the Act on Foundations. It is precisely within it that the conditions they must meet in order to function in accordance with the applicable law are defined. These include, among others:

• obligation to keep accounting records,
• reporting obligation,
• obligation to report every data update.

Among other documents that should be thoroughly reviewed when analyzing the foundation's operations, the most notable are legal regulations applicable to all entities and organizations, such as GDPR and copyright law, as well as regulations specific to the particular type of activity that the foundation is to conduct.

How are foundations controlled?

Supervision of foundations is exercised by various entities. Among them, mention should be made of, inter alia, the designated minister, the district governor (starosta), or tax authorities. Importantly, every foundation is required to prepare annual reports, which must be made publicly available. Such documents contain all information about the activities carried out in a given year and their financing.

Foundations receiving [it] are also burdened with an additional obligation a donation exceeding PLN 15,000 in value from companies or legal entities. This is because they must include such information in their report and publish it on their website. However, this obligation does not apply to donations made to them by individuals.