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.

Estate assets left to an organization commonly must be used within some time limit for exactly that reason.

Objectivism does not define private ownership as excluding joint ownership.

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".

“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.

"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.

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.

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.

Nice to meet you, Midas Mulligan.
When my ship comes in, the Atlantis project will be funded.

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.

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.

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.

Maybe. What's in it for me? :-)

Gravesite and headstone seems a lot like a foundation to me. Although a complete waste of real estate, they are not a real problem.

My greatest worry is to win something like $100 million, net. Geeze, that's a lot of money to get rid of in the years I have left. Might need help. Anyone interested??

I say "when I win the lottery" even though I don't buy lottery tickets. After all, I may find a winning lottery ticket lying in the street someday . . .

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.

The real reason I play the lotto ($6 per week) is for the ability to say "When I win the lottery............"

I'll do my best to get rid of all of it while I'm still on earth.

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.

Not sure i see the issue. Not sure I buy the "not owned" assertion. Who owns a gravesite with headstone?

I'm 74 also, and I very much care where my assets (whether large or small) go after I'm dead. I want to minimize the risk of them eventually falling into the wrong hands. The best way I know to minimize that risk is to leave them in the care of people who will spend them in the short term to defend or advance my values.

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.

"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.

Hell, I'm 74, don't really care about it after I'm dead. I agree with the "who gets anything?" question, outfits like Judicial Watch will get a lot. Most of my pleasure will come from NOT giving anything to certain people........ But I still have to win it, you know!! ;-)