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Grant-making foundations are private institutions that distribute their income to deserving organisations. In the USA, they enjoy fiscal incentives, but have to comply with complex rules securing that incentives are well deserved. In contrast, European countries have an embryonic legislation. This paper investigates whether the different tax rules adopted in the USA for independent and community foundations influence the grant-making behaviour of these organisations. Our econometric investigation underlines the existence of a large heterogeneity in the activities of both types, suggesting that the introduction of new regulations could benefit from a careful analysis of the nature and the features of these organisations. [ABSTRACT FROM AUTHOR]