Foundation is a non-profit organization that can be set by one or more persons. The main difference from association is that foundation is set by the founder by assignment of some funds or assets that will form the initial financial means of performing the activity. The other difference is the founding members number - associations must have at least 3 - three members while foundations can be set by one person.
Another thing to note is that foundations are generally thought of having the emphasis on the funding and attracting funds in order to support certain activity, while associations are more oriented to personal efforts. However both types of NGOs can be used for the same purpose.
Its worth to know that both associations and foundations can perform any economic activity apart from activity related to its purpose as long as the profit is used to support its main objectives. For example a chess club set as an association may run a restaurant and use the profit to fund organization of chess tournaments hiring a chess coach.
Are gifts and grants subject to corporation tax? In the cases in which the an NGO receives funds for projects that are funded by third parties, there is no profit from completed transactions and these funds are not subject to taxation with corporate tax. However in case of a profit from economic activity, it is subject to corporate tax. It is clear that receiving donations from the an NGO does not constitute business activity. There is a difference between sponsorship and donation though and there is a difference in their tax treatment. Sponsorship has no explicit legal regulation. Usually, by virtue of the sponsorship agreement, the sponsored NGO receives economic assistance (money, provision of material base, etc.) from the sponsor for realization of its non-profit goals, against which the NGOs undertakes to advertises the sponsor by promoting its name, trademark, its business or products in an appropriate manner. In view of the fact that there is no explicit legal regulation of the sponsorship contract, the parties to it define their own rights and obligations. Therefore, it is important to assess how much it would cost, what the sponsored NGO provides in return, to assess whether there is equivalence and if there is a profit subject to taxation. In the cases in which NGOs undertakes to be obliged with something that is not equivalent to what is received, then there is a sponsorship contract that is similar to donation contract. In these cases, the revenue form sponsorship is not taxable.