Eldar on Enterprise Foundations

Ofer Eldar (Duke University School of Law; Duke University - Fuqua School of Business; Duke Innovation & Entrepreneurship Initiative) has posted Are Enterprise Foundations Possible in the United States? (Forthcoming in Anne Sanders & Steen Thomsen (eds.), European Enterprise Foundations (Intersentia Cambridge, 2023)) on SSRN.  Here is the abstract:

This book chapter discusses the ability of entrepreneurs to form enterprise foundations in the US and the hurdles for forming them. The US regime for tax-exempt private foundations is very restrictive and does not practically allow them to have substantial ownership of for-profit firms. As a result, there is a perception that enterprise foundations are not feasible in the US. However, enterprise foundations, broadly defined as industrial firms controlled by any nonprofit firm, need not involve ownership by a private foundation (as it is defined in the US Tax Code) and could also be owned by other types of nonprofits. Such enterprise foundations are unlikely to benefit from key tax exemptions (such as tax-deductible donations or income tax exemptions), which probably explains their unpopularity. The chapter evaluates recent developments to liberalize the law of enterprise foundations, including (1) the "Newman's Own" exception that permits private foundations to own business firms under certain restrictive conditions, and (2) the perpetual purpose trust, which was recently utilized to transfer the ownership of Patagonia to trust and a non-exempt nonprofit.