Exponent Philanthropy recommends all foundations create a clear travel and expense reimbursement policy that achieves the following:
- Advises trustees and staff to choose cost-effective travel options. The law requires that these expenses not be “lavish or extravagant.”
- Describes the activities for which related travel may be reimbursed and any limits on quantity of travel per year.
- For example, board meetings, site visits, conferences
- Clarifies which expenses are—and are not—reimbursable.
- For example, a foundation might choose to reimburse coach airline travel but not first-class
- Applies the policy to anyone traveling or incurring expenses on behalf of the foundation. But not their spouses, dependents, or other family members. The foundation cannot legally pay for nor reimburse travel for these “disqualified persons” unless they too are conducting official foundation business.
- Outlines the documentation required to receive reimbursement and who will approve requests for reimbursement.
- For example, itemized phone bills for long distance board calls
As an alternative to reimbursing travel expenses, the IRS permits using per diem allowances for meals and lodging expenses. This is intended to simplify the burden of keeping detailed records.
Other special rules apply to many types of travel-related expenses and reimbursements, such as car allowances, security expenses, and more. Consult your foundation lawyer for advice and review of your travel reimbursement policy.
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