Should private foundations exist in an Objectivist society?

Posted by $ CBJ 3 years, 11 months ago to Philosophy
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I notice that many of the donors listed in this article are described as "private foundations". However, as far as I can see, the money and other assets of these foundations are not private property as Objectivists would define that term. No individual or group of individuals owns a foundation's assets. "According to the Foundation Center, a private foundation is a nongovernmental, nonprofit organization, which has a principal fund managed by its own trustees or directors." https://en.wikipedia.org/wiki/Private...

The relevant question is, does a person have a right to create a legal entity that is not privately owned, and transfer his or her property to that entity. In today's legal environment, I think both foundations and trusts would fall into this category. These types of legal entities often survive well beyond the deaths of the original donors.
SOURCE URL: http://www.foxnews.com/politics/2017/10/04/donors-anti-trump-resistance-group-revealed.html


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  • Posted by freedomforall 3 years, 11 months ago
    Why do people today use a private foundation? In an Objectivist society, what would be the reason to set up such a foundation?
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    • Posted by $ 3 years, 11 months ago
      In today's legal system, private foundations and trusts have some tax advantages, but that wouldn't be an issue in an Objectivist society. A more fundamental question is whether such an entity should be granted legal status in a society that is based upon private ownership of property. Foundations and trusts are not privately owned.
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      • Posted by $ jdg 3 years, 11 months ago
        Foundations and trusts are indeed private property, though there are restrictions comparable to "entail" on the ways the owner(s) can dispose of the property. The assertion that they are "not privately owned" is complete nonsense.

        I see no reason these forms of organization wouldn't continue to exist in the future. Even without the tax advantages, the rich people who choose to create endowments for parks, concert halls, or chairs in certain subjects at universities might still choose to do those things with their money.

        I recall one passage in AS which seemed to imply that Rand didn't believe it was valid for yesterday's owners to limit today's owners by placing restrictions. But isn't that a valid part of the right of yesterday's owner to decide what to do with his property? I'm not sure an exact line can be drawn, but I lean in favor of allowing such entail.
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        • Posted by $ 3 years, 11 months ago
          Trusts may be private property to a limited extent. Foundations are not private property at all. Point me to an owner.

          It's valid for an owner to decide to what to do with his property while he is alive, and to designate heirs to receive it upon his death. Beyond that yesterday's owner has no rights at all. "A 'right' is a moral principle defining and sanctioning a man's freedom of action in a social context." --Ayn Rand. Once a person is dead, he no longer has any rights because he does not exist.
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          • Posted by $ jdg 3 years, 11 months ago
            The owner of a trust or foundation is the person who is entitled by law to control what is done with its assets. This will usually be the beneficiary(ies), with the trustee(s) as his/their agent(s).

            If a foundation does not have anyone registered as a beneficiary then the trustee(s) are the owner(s).

            But in either case the owners' control is subject to the conditions under which the original donor(s) entrusted their assets to the trust/foundation. And the founding document usually spells out what happens to the assets if the trustee/s do not follow the conditions.
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            • Posted by ewv 3 years, 11 months ago
              Yes, any organization formed by private individuals in a voluntary association for a specific purpose is private. Forming such an organization does not make the assets it controls not private.

              The conditions on how donated assets are used are generally agreed on by those running the organization, which is why they are there -- in support of common values. If they violate the conditions then the assets should be disposed of in accordance with the original donor's directions. Some especially egregious exceptions are the major foundations originally funded by entrepreneurial capitalists and now used for far left and environmentalist political causes.

              Contortions in today's laws governing different kinds of corporations, including non-profits, are either something we have to live with or are useful protection, including against taxes. Private organizations will always exist; the laws governing them can be better in a better, capitalist social system.

              This is not an endorsement of every foundation, many of which today are established by and for unsavory politics or are promoting bad ideas or both (like Sorros or the classic example: the Fabian Socialists in Britain).
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              • Posted by $ 3 years, 11 months ago
                A group of individuals form a private foundation to promote an agreed-upon cause. Fine so far. Now fast-forward 50 years. The original founders are gone and a new set of trustees are in place. They may not share the founders’ fundamental values; and even if they do, they may disagree with the policies that the founders derived from those values. (Just look at this board for examples of how Objectivists can agree on basic principles but violently disagree on how they should be implemented.) The political and social context may have changed sufficiently during those 50 years to render the founders’ original intent unclear or irrelevant. (Example: What was the “original intent” of the framers of the U.S. Constitution in regard to gay marriage or internet privacy?)

                And that’s not the end to the problems created by a perpetual “private foundation” that has no real owners. Trustees who are decades removed from the original founders will have their own agenda and considerable discretion to advance their agenda, even if it does not honor the original founders’ vision. If they violate that vision, who has standing to sue them? Descendents of the original donors will have little standing or credibility (“My great-great-grandfather would not have wanted his money spent this way”), and those descendents may not even agree among themselves in regard to the foundation’s current activities.

                In order to be private, an instance of property requires an owner or group of owners other than some fictitious legal entity that itself has no owners. An ownerless foundation with little accountability and the resources to greatly influence public policy does not belong in a capitalist society or legal system. We pay the price for the existence of such foundations every day.
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                • Posted by ewv 3 years, 11 months ago
                  A foundation is not a fictitious entity. Like any corporation it consists of the people who voluntarily operate it for the purpose it serves. Any group or organization is an abstraction referring to individuals with some kind of relation between them. The law properly recognizes that. Calling it "fictitious" because understanding its meaning in reality requires abstract concepts beyond perceiving individuals one at a time is bad epistemology. Corporations own property as private property, managed, used and disposed of by the individuals who run the corporation. The assets are not "unowned".
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                  • Posted by $ 3 years, 11 months ago
                    Corporations own assets. Corporations themselves have owners (actual people). Foundations own assets. Foundations themselves have no owners (actual people). That's why I call them fictitious. Private property must ultimately be owned by one or more private individuals. Foundations and their assets do not meet this requirement. Therefore foundations and their assets are not private property.
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                    • Posted by ewv 3 years, 11 months ago
                      As corporations foundations are a group of people. They are real, not fictitious.
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                      • Posted by $ 3 years, 11 months ago
                        Those running the foundation are members of a real group, a group consisting of foundation employees, but this group is not the foundation itself. Likewise, those running a corporation are members of a real group, a group consisting of corporation employees, but this group is not the corporation itself. A corporation is a legally recognized entity that has employees (the group you refer to) and also has owners (the stockholders). Thus its assets are private property. A foundation is a legally recognized entity that has employees (the group you refer to) but no owners. Thus its assets are not private property.
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                        • Posted by ewv 3 years, 11 months ago
                          A foundation is a corporation. The "foundation itself" is an abstraction referring to the real people running it for a specific purpose in accordance with rules specified and delimited under law, not a fictional Platonic foundation-hood. Like any organization it has obvious referents in reality and serves a cognitive purpose in grouping them. When Ayn Rand started The Foundation for the New Intellectual as a 501(c)3 non-profit tax exempt corporation to promote her own ideas she was not fantasizing in contradiction with her own principles. That foundation continued and was intended to continue after her death; it was dissolved, over 10 years after she died, because it was not needed in parallel with ARI, another foundation that is not a fiction.
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                          • Posted by $ 3 years, 11 months ago
                            Foundations do exist; this I don’t dispute. My question is whether they should exist in a laissez-faire capitalist society in which all property is private. Ayn Rand had to work within the confines of the legal system, and the tax-exempt status likely was a primary reason that she created a foundation to promote her ideas, and why later Objectivist-oriented foundations were formed. In a more consistent capitalist system this wouldn’t have been necessary.

                            A foundation is a corporation, but a corporation without owners. It is not synonymous with the employees running it, and its assets are not private property. Foundations as well as many other organized entities legally existing in a mixed economy would not be appropriate in a society based on Objectivist principles.
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                            • Posted by ewv 3 years, 11 months ago
                              You said that they are fiction. They are not. The assets are the private property of those organized to control them in accordance with the charter of the organization. That property is not un-owned and not government owned. It doesn't make any difference that there are no shareholders. Repeating over and over that they are fiction and that the assets are not private property, without regard to what the concept refers to in reality, is unconvincing.

                              Whether or not a foundation would exist in a society with better laws depends on the purpose of those who establish them. There would ultimately be no need for a tax shelter, but an individual or group of individuals may still want to establish a foundation as an organization to promote some ideas or other purpose.
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                              • Posted by $ 3 years, 11 months ago
                                “The assets are the private property of those organized to control them in accordance with the charter of the organization.” No they’re not, and if you ask any foundation trustees they will tell you that the fact they are trustees does not give them ownership rights. The trustees have no legal recognition of ownership, no title to a foundation or its assets. They cannot buy or sell the foundation, or split it into shares for that purpose. They cannot list it as a personal asset. They cannot pledge it as collateral for a personal loan, or will it to heirs upon their death. The assets of a foundation are the private property of no one. Both the facts cited above and the legal framework giving rise to a foundation support this conclusion.
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                • Posted by freedomforall 3 years, 11 months ago
                  It is a very difficult issue for a person who sees the end of life approaching and wants his assets to continue support hisvalues. I have been thinking about it for decades and still haven't come up with a satisfactory answer.
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                  • Posted by $ 3 years, 11 months ago
                    I'm 74 and also want my assets to support my values. At present I think the best course is to leave my assets to people who will spend them in the short term to defend or advance my values.
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            • Posted by $ 3 years, 11 months ago
              Re: "If a foundation does not have anyone registered as a beneficiary then the trustee(s) are the owner(s)." No they're not. The trustees have no ownership interests in the foundation, either legally or morally. They are agents. Theoretically the original donor's wishes control the disposition of the foundation's assets, but we see how that has worked out in practice.

              The question is whether such foundations should exist in an Objectivist society. I think the answer is “no”. Although a person has a right to designate heirs to which his property passes upon his death, a person has no moral right to exercise control of property from beyond the grave. In theory “private foundations” have no place in a capitalist society, and in practice they are easily corrupted into becoming vehicles for anti-capitalist activism.

              In What is Capitalism Ayn Rand said, “Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.” She was right.
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              • Posted by $ jdg 3 years, 11 months ago
                This strikes a little close to home for me, as I am signed up for cryonic suspension with a foundation made up of others like myself, and I hope that none of them shares your view that they have no duties to us who funded the effort once we are legally dead. Certainly I will keep my word to the other members if it should turn out that I outlive them.
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                • Posted by $ 3 years, 11 months ago
                  That's kind of a separate but related issue, and deserves its own discussion. My thoughts on the topic refer to those who have died without making any plans to return.
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  • Posted by $ Dobrien 3 years, 11 months ago
    Foundations have been working at undermining our freedom and country for 100+ yrs .
    https://www.youtube.com/watch?v=8RgRG...
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    • Posted by $ allosaur 3 years, 11 months ago
      Such as one of the most recent and outrageously glaring Clinton Crime Cartel Foundation with all foreigner bribe money eagerly accepted.
      But that was okay.
      After all, it were those o so precious Clinton lib elites of all lib elites, the Evil Hag and her "bimbo eruptions" protected rapist darling Billy (aka Slick Willie aka The Teflon Man).
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      • Posted by $ Dobrien 3 years, 11 months ago
        Yes and the new Obama Foundation.
        The Obama Foundation was established in January 2014 to carry on the great, unfinished project of renewal and global progress. Officially established as an operating, 501(c)(3) nonprofit corporation, the Foundation is governed by a volunteer board of directors chaired by civic leader Martin Nesbitt.

        “Bid to buy for-profit college by former Obama insiders raises questions,” read the headline of Michael Stratford and Kimberly Hefling’s story. Questions like, Are you kidding me? For years the Obama administration has scrutinized and tightened the regulation of for-profit colleges, the most famous of which, the University of Phoenix, has been subject to multiple investigations and court actions. The battle has taken a toll. As Preston Cooper observes, shares of the Apollo Education Group, which sold at $87 when the president was inaugurated, have sunk to less than $10 a piece. Critics of the for-profits are gleeful. “Let’s hope this Phoenix does not rise from the ashes!” Alan Singer, a social studies educator at Hofstra University, lamely punned on the Huffington Post last spring. Sorry professor, but you might not get your wish. Because some of the very same people who decided that for-profit colleges should be run into the ground, and successfully achieved that result (with not a little help from the colleges themselves), have now decided, well, hey, what do you know, maybe these diploma mills aren’t so gross and hazardous after all.

        Among Marty Nesbitt’s various enterprises is the Vistria Group, a private equity firm he founded a few years back and whose chief operating officer, Tony Miller, was formerly deputy secretary of Education under President Obama. Last February Vistria and other investors agreed to buy the Apollo group and the University of Phoenix for $1 billion in cash. When the deal closes, Miller will be chairman of the board.

        Read more at: http://www.nationalreview.com/article...
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        • Posted by $ Dobrien 3 years, 11 months ago
          For that to happen requires the approval of both Apollo’s creditors and Miller’s former employer, which provides the company with billions of dollars a year in student loans and grants. “With those decisions looming,” Politico reports, “Miller and at least one other former Obama insider have met with staff to Sens. Elizabeth Warren (D., Mass.), Richard Blumenthal (D., Conn.), and Dick Durbin (D., Ill.), looking to reassure some of the loudest critics of for-profit colleges in the president’s own party.” Alongside Miller in several of those meetings was Jonathan Swan, a former Obama administration legislative Sherpa now cashing in at Vistria. A former Obama deputy communications director has been brought on to consult as well. “The holding company set up by the investors to buy the University of Phoenix has also paid $80,000 to lobbyists,” including Republicans. The band’s all back together, leveraging the relationships and knowledge and clout acquired in the public sector to rake in the bucks in the private one.
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  • Posted by ycandrea 3 years, 11 months ago
    I would add to that "Corporations". I strongly believe that when corporations came into being it was the end of Capitalism in our country. Imop, corporations are just a corrupt way to deny ownership or responsibility for a business to a private person. Just as Dagney had to divorce herself from the "board of directors" to build the John Galt Line. She took full ownership and responsibility. I think this was Ayn Rand's statement about corporations.
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    • Posted by $ jdg 3 years, 11 months ago
      I read Dagny's resignation from the board as done to avoid any possible conflict of interest between her duties to each of the two companies had she kept her seat.

      I see no reason to refrain from using either the share-based (corporate) or partnership form in setting up a business venture, though a good case can be made for abolishing the corporate veil. Certainly I'd like to see bankers and brokers, who handle other people's life savings, be made liable to lose their own life savings if they screw up and lose yours through malpractice.
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  • Posted by Herb7734 3 years, 11 months ago
    If America was less litigious there would be a good deal less need to create entities as avatars for business. For example, we were sued in Federal Court for putting out an unauthorized biography in comic book form. We won, hands down. However, as a new company it cost us around $35,000 to defend ourselves, which pretty much wiped out our bank account. Had we lost the corporation we formed would have been bankrupt, but at least we would have preserved our personal assets.
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    • Posted by $ 3 years, 11 months ago
      For-profit corporations are privately owned, and thus would exist in some form within an Objectivist society (which would likely be far less litigious). However, I don't think foundations are private property as an Objectivist would define the term.
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      • Posted by Herb7734 3 years, 11 months ago
        Foundations are a method of gathering and accumulating money free of taxation. As a result, you get everything from the worst to the noblest kind of legal entities. Mostly the worse as in the Clinton Foundation.
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  • Posted by $ blarman 3 years, 11 months ago
    "does a person have a right to create a legal entity that is not privately owned"

    Strictly speaking, no, because rights are personal - not public. I can create a corporate entity, perhaps, but it's legal status can't be dictated by me alone. Legal status is granted by the rest of society and is usually governed by laws so that everyone understands the proper process and agree on the method and parameters employed. So the first question I would ask is step back and say "Would an Objectivist society create legal laws which recognized and legitimized the creation of corporations - ie companies of arbitrary or detached ownership." The alternative is to simply say that no legal status will be granted to any corporation or association which is not privately held.

    That brings up a second question: if "public" corporations are not allowed, how does one go about raising investment money through stock offerings, etc.?
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    • Posted by $ 3 years, 11 months ago
      Not sure what you mean by "arbitrary or detached ownership." Private ownership is still maintained in corporations whose stock is publicly and freely traded. Foundations, by their very nature, have no private owners. So by Objectivist standards, in which all (non-government) property should be private, I do not think that foundations are legitimate entities.
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      • Posted by $ blarman 3 years, 11 months ago
        Normally, when one is talking about "private" ownership one is making a distinction between something being run by a government entity vs not, rather than trying to distinguish between an identifiable individual vs a group. So your statement that "foundations, by their very nature, have no private owners" is confusing to me. How are you attempting to use the word private within your question? (My second question above is a consequence of the distinctive application of the word "private" being applied to mean anything with a group ownership rather than single-ownership.)
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        • Posted by $ 3 years, 11 months ago
          A private corporation has owners, those who hold shares of its stock, which can be bought and sold. There are no identifiable owners of a "private foundation". Neither the foundation officers, the board of trustees, members of the general public, nor the government can own a foundation or any fractional part of it. There is no answer to the question, "Whose foundation is it?"
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          • Posted by $ blarman 3 years, 11 months ago
            So the real question is "who benefits from the operations of the Foundation." You are limiting your scope of "ownership" to who derives monetary compensation from its operation. It seems like the Foundations you are referring to don't operate on a monetary basis and so the very nature of the Foundation's value structure is foreign to such a constrained notion of "ownership". If one defines ownership as "one who derives value from something and can control its function", I think we get a little closer to a working definition for use in this case. I think what you are really getting at is simply this question: Would an Objectivist society prohibit the legal recognition of what we might also call a charity.

            Classified that way, I think you run into a conundrum because two competing ideals would be in play. The first is the rejection of altruism which many Objectivists associate with charities. The second would be the Objectivist rejection of government meddling in the associations of businesses and private groups at all. So as a compromise between the two, I don't think you'd have any kind of official "disapproval" of such an entity, but societally such would be frowned on.

            Legally, however, what would be the point of prohibiting such an arrangement? Most corporations are formed merely for the purpose of legal recognition for taxes and control - two notions Objectivists object to!
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            • Posted by $ 3 years, 11 months ago
              Re: “the real question is ‘who benefits from the operations of the Foundation.’” That’s not the real or fundamental question. The real question is whether such an institution should exist at all. There will always be people who benefit from a socially recognized entity, whether that entity is morally entitled to exist or not. The beneficiaries in this case are people employed by foundations and those to whom the foundations’ assets are distributed. That doesn’t equate to ownership, and does not address the issue of whether such foundations are legitimate in an Objectivist, capitalist society.

              Conceptually, I don’t think foundations meet the standard of any rational definition of “ownership”. By its legally established nature, a foundation cannot be bought, sold or traded in the marketplace. The persons operating a foundation are “agents”, but agents that have no owner to report to. In a fully consistent capitalist society based on private ownership of all (non-government) property, a foundation of the type existing today would not be recognized as a legitimate legal entity.
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              • Posted by $ blarman 3 years, 11 months ago
                "The real question is whether such an institution should exist at all."

                Actually, if you go back to my original question, it answers why it exists: because someone feels it is in their interest enough to expend the resources and time to do so. Being recognized by society is secondary: mobs exist and are considered beneficiary to those who participate in them, yet they have no (positive) protective legal status.

                "The beneficiaries in this case are people employed by foundations..."

                You have to get into the why here, and that's not necessarily going to be the same for all foundations. My employer sponsors and runs one that works with legislators on educational issues. Sure, it benefits the three people who get paychecks, but my employer (who sponsors it) also feels that he personally benefits.

                "Conceptually, I don’t think foundations meet the standard of any rational definition of “ownership”."

                If one narrowly defines ownership as a pecuniary/investment interest, yes, it's easy to reach that conclusion. What is easy to forget is that money is merely a tool - a medium of exchange for getting some things in life. Money is not the only medium of exchange, however. Power and personal relationships are among others. My personal experience has been that foundations merely are trading houses for these other kinds of power.
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                • Posted by $ 3 years, 11 months ago
                  My question is not why foundations exist, it is whether they should exist in an Objectivist society. I don’t think that either criminal mobs or foundations (as presently constituted) should exist.

                  The question “who benefits” is also irrelevant. Again, there will always be people who derive certain benefits from any kind of organization, otherwise that organization would have been formed in the first place. However, that does not answer the question of whether the organization’s assets are private property, as Objectivism defines the term.

                  I don’t define ownership as a “pecuniary/investment interest”, I use the Objectivist definition: the right to the use and disposal of a given unit of property. Foundation trustees use and dispose of the foundation’s assets; but they are not owners, they are agents who are not answerable to any owner, since there isn’t one. Essentially, a foundation’s assets are property without any real, identifiable owner, and thus they are not “private property” within the Objectivist meaning of that term.
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                  • Posted by $ blarman 3 years, 11 months ago
                    Do the Trustees not have the right of use and disposal of the assets of the Foundation? Yes. So they are - according to your definition - the "owners". That there are rules outlining acceptable disposition and accountability for that disposition to a Board or other group isn't an indication of non-ownership in my book. Can those same Trustees also not be sued for Breach of Fiduciary Duty? Yes. Can those same Trustees be prosecuted for Fraud or Embezzlement of Foundation funds? Yes, again. I'm not seeing the line you're trying to draw here.

                    Let us consider the concept of a corporation in the exact same sphere. Does the corporation exist ephemerally? Absolutely. It is merely a grouping indicator - the "corporation" does not act of its own free will and choice (which is the same reason I find the discussions on corporate "speech" to be a complete red herring). How is a corporation run? By placing assets into the hands of corporate officers for use. Are those corporate officers responsible to report to a Board or other group regarding their uses of those assets? Absolutely. And what actually constitutes "ownership" in such a corporation? A share of the profits - a monetary measure of value - according to the performance of corporation. If we compare that to the Foundation, all that is really different is that the type of profits being derived isn't measured in some kind of monetary remuneration. The money and "hard" assets of the Foundation are being used to pursue non-pecuniary interests rather than to grow the pecuniary interests.

                    This is where I come back to the purpose of money: as an exchange medium. If all we're doing through a corporation is to enable us to acquire other things, is there a certain class of things we want that do not have a direct "price" and for which another exchange medium (other than money) is necessary? I say yes. Thus the corporation - which is structured around monetary exchanges - becomes a poor facilitator of these types of exchanges where Foundations fit the bill.
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                    • Posted by $ 3 years, 11 months ago
                      The trustees are not the owners of a foundation any more than a CEO is the owner of the corporation for which he works. They are both agents, and their right to the use and disposal of the assets they oversee is a derived right. In the case of a corporation, this right is derived from the owners (stockholders) and is revocable at any time. In the case of a foundation, they are employees (agents) of a fictitious entity that has been granted legal status, but has no true owners. Thus the employees of a foundation have little accountability to anyone outside it.

                      The ability to sue a foundation is weak (who has standing?) and becomes weaker the longer a foundation is in existence. The original donors and their children can occasionally win lawsuits over improper use of a foundation’s assets, but successful suits become impossible after a few generations, as the descendents become more remote and the likelihood increases that they will disagree among themselves.

                      Money, profits and types of remuneration are not the issue here. The issue is whether real property with no identifiable owner is legitimate in a capitalist society. As I said in an earlier post, in order to be private, an instance of property requires an owner or group of owners other than some fictitious legal entity that itself has no owners. An ownerless foundation with little accountability and the resources to greatly influence public policy does not belong in a capitalist society or legal system. We pay the price for the existence of such foundations every day.
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                      • Posted by $ blarman 3 years, 11 months ago
                        "The trustees are not the owners of a foundation any more than a CEO is the owner of the corporation for which he works. "

                        I agree, but as both the corporation AND the foundation are completely ephemeral constructs, I don't see any relevant rebuttal in this statement. Neither corporations nor foundations can act. Neither can utilize or dispose of assets. Only people can utilize or dispose of assets. Let's not get distracted with a straw man. (Although it does raise an interesting question: if a corporation is merely an idea and Objectivists hold that individuals are entitled to the products of their minds, then corporations - and Foundations - can then be considered (intellectual) property. Hmmmm...)

                        "They are both agents, and their right to the use and disposal of the assets they oversee is a derived right."

                        That they can be held responsible post facto and removed from their stewardship or agent role is irrelevant to the fact that those individuals have the power to utilize and/or dispose of the assets of his firm - ownership according to the Objectivist definition supplied.


                        Let us examine what an agent really is, because I think it may be constructive. An agent has the ability to control and act usually for the purpose of disposing of or use of assets. Whether they are agents for others or agents for themselves concerns only the future prospects for the further disposition of other assets - it has nothing whatsoever to do with the present assets under their control - their ownership.

                        Take a delivery truck driver, for instance. Is he an agent? Yes. He is being given the control and disposition of a truck and the cargo on the truck. Thus he is being made the owner of those items. That he is expected to transfer the ownership of those items (both cargo and truck) at a future time is irrelevant in measuring ownership at a given point in time. If the driver performs his duty and transfers ownership of the cargo to the customer (and the truck back to the motor pool), he is then evaluated as having made appropriate ownership use of those assets and he is rewarded (paid) AND given the opportunity (he keeps his job) to take ownership again of a truck and goods to deliver the next day. If he slides off the road and rolls the truck (destroying the cargo), however, there is no recourse in the ownership of the goods - they have been permanently disposed of and ownership irrevocably transferred. Can the driver be evaluated for his agent performance? Absolutely. Can the driver be punished with a loss of his job? Yup. He can even be ordered to pay fines and restitution if he was found criminally negligent. But that in no way affects the fact that at the time the driver controlled the disposition of the property in question - he owned it. If he did not own it, he would not be responsible to answer for its disposition.
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                        • Posted by $ 3 years, 11 months ago
                          “Agent [ey-juh nt]: a person or business authorized to act on another's behalf.”
                          http://www.dictionary.com/browse/agen...

                          Neither corporations nor foundations are “ephemeral constructs” any more than ownership itself is. Both corporations and foundations are legally established forms of organization. Corporations typically have owners, agents and assets. Foundations have agents and assets, but no owners.

                          An agent is not an owner, either in an everyday sense or in a legal sense. To say otherwise is to say, for instance, that a motorist does not own his car while it is in the repair shop being serviced by others, or that a brokerage owns the stock in your account. An agent is one who is given the responsibility of performing certain actions on behalf of an actual owner, who is typically the one holding legal title to the asset in question. Objectivism holds that certain rights can be delegated to an agent, but ownership is not thereby transferred to that agent.

                          A foundation has assets and agents but no legal owner. That is why it is an inappropriate form of organization in a capitalist economy in which all (non-government) property is private.
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                          • Posted by $ blarman 3 years, 11 months ago
                            "Neither corporations nor foundations are “ephemeral constructs” any more than ownership itself is."

                            Sure they are. Again: can a corporation or foundation vote? No. Can they purchase property or hire people? No. Only people can do those things. Corporations are convenient containers for legal purposes - nothing more. It is only the people within the organizations who actually do anything.

                            What is the real purpose someone creates a corporation in the first place? Tax and legal liability. It is to shield their personal assets to some degree from business liabilities and to provide a convenient method for the government to tax you. That's about it. Foundations are created pretty much for the same reasons, they just tend to try to avoid the taxation part altogether.

                            "An agent is not an owner, either in an everyday sense or in a legal sense."

                            According to the definition you wanted to use - the Objectivist one - I can't see any real differentiation there. The definition has no limitations or exclusions for agents.

                            "A foundation has assets and agents but no legal owner."

                            I think you've constructed a straw man and now you're tilting at windmills. I'll leave you to it.
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  • Posted by CircuitGuy 3 years, 11 months ago
    "both foundations and trusts would fall into this category."
    If my wife and I should both die before our kids are adults, our wealth would go into a trust for the kids' benefit. A financial institution would manage the trust and pay for their expenses, including the cost food, rent, entertainment, education, a house, or a well-planned business, all up to reasonable limits. When they're 30 y/o, they'd get the rest.

    How would this wealth be managed without trusts? We could give it relatives to manage, but they might get sued for something unrelated or have an addict or thief in their life steal it. I also like the notion of the people caring for our kids being different from the place managing their wealth, so the could sort-of keep one another from going overboard.

    Foundations
    Our UU society has a foundation managing its wealth. Some people want to donate money to a fund that will be earmarked for a specific purpose such as the music program, social justice, maintaining the building, or children's programming. I think having the foundation helps people fund the things they want to fund.
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    • Posted by $ 3 years, 11 months ago
      The personal trusts you mention have both a limited duration and ultimate private owners. The university foundations could be replaced in principle with donations made directly to the programs favored by the donors. Some of the larger foundations, structured to exist indefinitely, contribute to political and social causes that can vary widely from the intent of the original founders.

      And there still remains the question: Under Objectivist legal theory, would the assets of a foundation or trust be considered private property? If not, do such arrangements violate the principle that all (non-governmental) property should be private?
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      • Posted by $ Dobrien 3 years, 11 months ago
        It is objective to give foundations a tax exempt
        Status only to then have those same foundations fund the destruction of the rugged individualism, that is what the minutes of the carnage foundation meetings contained among other statist agendas.
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      • Posted by CircuitGuy 3 years, 11 months ago
        Interesting. I am not one to know, but raises another question (maybe it's the same question) of how they would handle public companies and corporations.
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        • Posted by $ 3 years, 11 months ago
          That's an issue that hasn't yet been addressed in depth. Corporations usually do have owners and thus are private property, but their structure might be somewhat different in an Objectivist society.
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  • Posted by $ Thoritsu 3 years, 11 months ago
    How is this legal entity with substantive resources not privately owned? Someone(s) has the ability to direct the resources; therefore, that person "owns" them.
    The only issue here is the tax approach to this collection of donations, to which there are a variety of approaches and no doubt, opinions.
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    • Posted by $ 3 years, 11 months ago
      Both owners and agents have the ability to direct resources. Foundation officers and employees are agents. No person or group of persons is legally or morally the owner of a foundation. This makes foundations, as presently constituted, something other than private property, and not legitimate institutions in an Objectivist or capitalist society.
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      • Posted by $ Thoritsu 3 years, 11 months ago
        Are you just arguing that the institution of a foundation should not be allowed because it serves no positive purpose that could not otherwise be accomplished via a company?

        If so, I'm not sure the ownership part is the issue, but the separate government treatment.

        Seems like the articles of the foundation are the Constitution and the agents are then the executive branch. In that way, how is a foundation really different than the founding of a company or country? Seems like a non-profit could function identically.

        If I were really wealthy, I can imagine trying to set up a foundation or a company to further the ends of individualism and achieve some modicum of immortality.
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        • Posted by $ 3 years, 11 months ago
          No, I'm not arguing against foundations based on whether or not they serve a "positive purpose". I'm arguing against them based on the fact that they are not private property, as Objectivism defines the term. In a fully consistent capitalist society based on private ownership of all (non-government) property, a foundation of the type existing today would not be recognized as a legitimate legal entity. Many of the abuses associated with foundations, such as support of anti-capitalist activism, are in part the result of their being essentially "unowned" property that has been taken over by those hostile to individualist values.
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          • Posted by ewv 3 years, 11 months ago
            Objectivism does not define private ownership as excluding joint ownership.
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            • Posted by $ 3 years, 11 months ago
              True, but foundations are not owned jointly either. What group owns them? What group has title to them? What group can buy or sell them, in whole or in part? As far as I can see, no such group exists.
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              • Posted by ewv 3 years, 11 months ago
                The group of people are those who are running the organization. They acquire and dispose of assets all the time. The property is the assets, not the people. Of course the people can't be bought and sold. When an individual is sole owner of an asset he can't be bought or sold either. Private property ownership of an asset does not require that. When a business corporation is sold, the assets are sold giving the buyer control in the form of control or a degree of control over the corporation.
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                • Posted by $ 3 years, 11 months ago
                  Okay, my previous post was unclear. Let me rephrase it using fewer pronouns. What group owns a foundation? What group has title to a foundation? What group can buy or sell a foundation, in whole or in part? As far as I can see, no such group exists. A foundation, under the terms of its legal recognition, can have no owner or group of owners. No person or group can claim title to a foundation. A foundation can not be bought or sold or divided into shares that can be bought or sold. Foundation employees can and do control the assets and the day-to-day operations of a foundation, but these employees are not owners, any more than employees of a corporation are owners of that corporation simply because these people are employed by that corporation. A foundation has no actual owners and thus is not private (privately owned) property as Objectivists use the term.
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                  • Posted by ewv 3 years, 11 months ago
                    The owners of the assets are the people acting in accordance with the charter of the foundation that organizes them. There are no stock holders owning shares of the foundation. There are different kinds of corporations, acting in accordance with different provisions under law.
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                    • Posted by $ 3 years, 11 months ago
                      What definition of ownership are you employing? The “people acting in accordance with the charter of the foundation” are employees of the foundation, not owners. Just like “people acting in accordance with the mission of a profit-making corporation” are employees, not owners (unless they have stock).
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                      • Posted by ewv 3 years, 11 months ago
                        Ownership is the right of use and disposal. That is what those running the organization do.
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                        • Posted by $ 3 years, 11 months ago
                          Those running for-profit corporations do the same thing. That does not make them owners. They are simply acting as employees of the true owners, the stockholders. Foundations likewise have employees, but no true owners, no one that holds title to their assets.
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                          • Posted by ewv 3 years, 10 months ago
                            People running a private organization are controlling the organization's private property. The property is neither unowned nor owned by government.
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                            • Posted by $ 3 years, 10 months ago
                              If the organization's property is private, who owns the organization? Who has shares in the organization? Who can buy or sell the organization or any part of it? No one.
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                              • Posted by ewv 3 years, 10 months ago
                                The organization is group of private people in voluntary association. It does not have to be "owned" in the sense of having a deed to it. The organization is the people in it.
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                                • Posted by $ 3 years, 10 months ago
                                  That’s all true when you’re talking about a foundation as an organization. The foundation’s assets are another story. The assets of a regular corporation are owned by its stockholders. The assets of a foundation are owned by no person or group of persons, including the foundation’s trustees and employees. In a society in which all property is supposed to be private, this is an undesirable state of affairs. Among other things, it leaves the door wide open for a foundation’s trustees to perform an ideological takeover, and employ its assets to finance and promote values that are hostile to those of a free society.
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          • Posted by $ Thoritsu 3 years, 11 months ago
            Not sure i see the issue. Not sure I buy the "not owned" assertion. Who owns a gravesite with headstone?
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            • Posted by $ 3 years, 11 months ago
              I would guess that cemeteries with gravestones exist under many different forms of ownership (or lack thereof). In principle, however, a cemetery can be organized and run as a for-profit company. It would simply be a company that provides care and maintenance of other people’s property for a one-time or periodic fee. The owners might be the descendants or heirs of the deceased.
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  • Posted by LibertyBelle 3 years, 11 months ago
    What do you mean? If it's not owned by a govern-
    ment, it must be privately owned,or it is not owned at all. People have a right to get together and put their money together, if nobody is forcing them to. It
    may not be very sensibly done; it may not be very rationally administered in a particular case; but that does not change the fact that people do have a right to deal with one another,by their own free choice. (This does not mean they have a right to commit fraud).
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    • Posted by $ 3 years, 11 months ago
      Foundations are not owned at all. Pick a foundation and point me to an owner, as the term is defined in Objectivism (or even in statutory law). Foundations certainly have agents to administer them, but not owners.
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  • Posted by $ Temlakos 3 years, 11 months ago
    If I read the original poster right, why would anyone need a foundation in the present sense of the term? Would not a joint-stock corporation serve just as well, even if it were to operate, not to grow as an investment, but to serve a charitable or political cause? In fact, Section 501(c)(3) of the Internal Revenue Code would not survive the Code itself.
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  • Posted by jimjamesjames 3 years, 11 months ago
    When I win the Megamillions, it's going into a foundation or trust managed by me and a couple of people who think like me and it will last long after me. It will not be for charity.
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    • Posted by $ 3 years, 11 months ago
      How long do you plan to have your foundation last? 50 years? 100 years? Indefinitely? Charity or not, the longer your foundation goes on, the greater the chance that it will go off the rails, as far as your original intent is concerned. If I win the lottery, any donations I make will be to people whose ideas I support and who can put the money to immediate use to advance those ideas.
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