A foundation is a non-profit type organization, the founders of which are ordinary citizens or legal entities, who make property contributions to the organization on a voluntary basis. The organizers of the institution pursue social and charitable, cultural and educational, other goals useful to the public.
Legal features of the work of funds
The legal provisions of the funds are determined not only by the Civil Code, but also by the law on non-profit organizations. A foundation is an organization whose specificity dictates submission to a specific law. The activities of certain categories of funds fall under special regulations. Public associations are controlled by the law on public organizations. Charitable foundations operate under the law on charitable activities. Membership is not provided for within the organization, and the founders themselves do not participate in the organization’s work and do not have the authority to manage funds.
State funds
The concept of the fund includes not only non-profit institutions, which were discussed above. There are funds of the Russian Federation, which are classified as state. Extra-budgetary funds began to appear when there was a reform of the financial system of Russia in the 1990s. It pushed to the creation of specific organizations the relevance of solving a number of social and economic problems. In the future, it was planned to create a sustainable pension system, medical care and social insurance. An off-budget fund is a stable source of funds that is used to finance the specific needs of a social level society and which lends itself to long-term forecasting. Sources of replenishment of the organization are clearly fixed, and the use of funds is predetermined by the intended purpose.
Types of funds and directions of expenditure
Extrabudgetary funds play an important role in the country's centralized finance system. The organization accumulates funds outside the federal budget and outside the budgets of the constituent entities of Russia. All money is used to exercise the constitutional rights of citizens of the country. The Social Fund is aimed at providing people with age, sickness, disability, to help with loss of breadwinner and in many other situations. The budget of each organization is approved at a formal meeting in the format of federal laws. The income of institutions is provided by the mandatory payment of a single social tax. The structure of extrabudgetary funds of the state type includes:
- Russian Pension Fund;
- social insurance fund;
- federal organization;
- territorial organization of health insurance.
The subtleties of budgeting
An extra-budgetary fund is a state organization formed with extra-budgetary funds, which is controlled by the country's authorities, and whose budget is aimed solely at meeting the social needs of both general federal and territorial purposes. The budget of organizations and its project for the coming year is formed by the management bodies of the latter. Projects are submitted to federal executive bodies and adopted in the format of federal legislation. If there is a deficit, the sources of its liquidation are considered and approved. The project should include both sources of income and sources of expenditure. Before its approval, the budget must go through a chain of public authorities, including the Audit Chamber.
Russian Pension Fund
The largest extrabudgetary fund in the country is the Pension Fund. He plays the role of the country's most significant social institution. Its formation is due to the need to manage the finances of pension provision by the state. The Pension Fund simultaneously solves two problems:
- Withdrawal of pension funds from the structure of the consolidated budget.
- The withdrawal of pension funds flows to the level of an independent process.
The budget is formed by allocating funds to the Pension Fund in the form of insurance contributions and payments by employers. As a result, the state budget is relieved of the burden of fulfilling obligations to pensioners. Obligations are performed at the expense of insurance payment. The latest reform structured the pension into three parts: basic, insurance and funded.
Distribution of Pension Organization Payments
The Pension Fund guarantees the payment of a basic pension to all persons of retirement age. Increased payments are aimed at people over the age of 80 and people with the 1st disability group. The size of the insurance part of payments depends solely on the seniority of the pensioner and on the size of his salary. The payment is formed by contributions to the Pension Fund of insurance premiums every month. The insurance part of the payments corresponds to the ratio of the estimated pension capital to the number of months of the expected payment period. In fact, funds are not collected on the account of one person, but are used for payments to other pensioners.
Social insurance fund
The first social insurance fund in Russia appeared in 1992. It is regulated by the laws of the country. Like the Pension Fund, the organization acts as an independent financial institution. Any property of the fund is federal property. Funds are not subject to withdrawal and do not form part of the budgets at any of the levels. Social insurance funds are replenished by tax deductions. This is a single social tax and tax on the application of the simplified taxation system, tax on periodic income and agricultural tax. The main direction of expenditure of funds from the association is the payment of benefits to persons who have temporary disability. The maximum allowance is strictly limited by normative values.
