What

The Link Associates Foundation is a private foundation, developed to support the mission of Link Associates and has done so since its incorporation in 1997. The Tax Reform Act of 1969 created private foundations and imposed greater restrictions on this classification, including excise taxes and lower donor deductions for contributions. This Act created supporting organizations as an exception to private foundations—because they are organized, operated, and controlled in the public interest. As such, the Link Foundation is not subject to the problems and abuses found in foundations that led to the creation and associated restrictions on private foundations.

governance

The Foundation’s application for exempt status filed on Form 1023 demonstrated that the organization met these three criteria, for the IRS granted exempt status and public charity (or non-private foundation) status under 509 (a) (3), according to the exemption letters on file. The Foundation exists to support Link Associates and its mission of assisting citizens with intellectual disabilities. The board of the Foundation consists of at least 50% board members from Link Associates. No disqualified person controls the Foundation or Link Associates. The Link Foundation is not, nor has it ever been, a public charity by reason of section 509(a) (1) and is not required to pass a public support test, since it claims public charity status by virtue of qualifying as a support organization under section 509 (a) (3), it must meet the criteria detailed above. To maintain its public charity status, the Foundation must continue to operate in accordance with the three criteria of section 509(a){3) listed above.

WHY

One of the biggest advantages of the Link Foundation is as a supporting organization it is considered a public charity. As such, the tax-deductibility of cash gifts and appreciated property is potentially higher. Appreciated property valuations aren’t reduced by untaxed appreciation and supporting organizations, are not subject to the earnings excise tax. A supporting organization cannot have a closely controlled board of directors and needs to be overlap or even duplication of the board members from both the supporting organization and the supported public charity. As a supporting organization, the Link Foundation is, by default, considered subordinate to and controlled by Link Associates. This lack of independence is often the reason some donors choose a private foundation instead of a supporting organization.

connection

To ensure the Link Foundation remains a supporting organization, considered subordinate to and controlled by Link Associates the members of the Link Associates Building and Grounds Committee of the board participates in all Link Foundation meetings. The amount of both organization’s debt as well as their bank balances are shared with both boards of directors in their meeting materials.

IRS COdes 501(c)(3) and 509(a)(3)

The Foundation's tax-exempt status granted under Internal Revenue Code section 501 (c)(3), but also the Foundation (was granted public charity status or non-private foundation status because it. is an organization which exists to support another charitable organization; this type of supporting organization is described in section 509(a)(3). To qualify as a 509(a) (3) supporting organization, an organization must meet three criteria:

1. It must be organized and at all times operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of a specific organization which qualifies as a charitable organization. The organization to be benefited should be clearly specified and the supporting organization’s documents should prohibit it from benefiting any other organization.

2. It must be operated, supervised, or controlled by or in connection with the supporting organization. For example, the board of the supported organization or the same persons which control the supported organization also control the supporting organization.

3. It must not be "controlled directly or indirectly by one or more disqualified persons (other than foundation managers) and other than the supported organization. A disqualified person is a substantial contributor, an owner of more than 20% of the voting power of an organization which is a substantial contributor to the foundation, a family member of a substantial contributor or of a 20% owner in an entity which is a substantial contributor, or a corporation, partnership, trust, or estate in which a substantial contributor holds 35% or more of the ownership.