Here are suggestions offered by funders in our online Member Discussion Community: Response 1 Get very clear on your Mission or Program Area. What you are willing to fund and where you are funding is critical. Align yourself with the experts. Talk to other funders. Talk to the best service providers. Talk to academics. Find... Read More
Yes. Private foundations can fund the charitable activities of government agencies or units of government (e.g., public libraries, fire departments), and can do so without using expenditure responsibility. Your foundation should request a copy of the document (e.g., legislative action) that shows the grantee’s governmental status. Be sure the grant agreement states that the grant... Read More
As an exception to the private foundation self-dealing rules, family members may be paid reasonable compensation for reasonable and necessary services to the foundation. The Internal Revenue Service says that reasonable compensation “is only such amount as would ordinarily be paid for like services by like enterprises under like circumstances.” No formula is available that... Read More
Yes. According to federal tax law, qualifying distributions include reasonable administrative expenses necessary for conducting a foundation’s charitable activities (e.g., staff salaries, insurance, training, travel, rent). Reasonable site visit expenses qualify here. Other qualifying distributions include: Most grants for charitable purposes to public charities, noncharities, and eligible individuals (e.g., scholarships) if specific IRS rules are... Read More
No special steps are necessary if the donor advised fund (DAF) is housed at a 501(c)(3) organization, and the donation will count toward your foundation’s 5% distribution requirement. Read more about creating and donating to DAFs in our publication Strategic Uses of Donor Advised Funds. Read More
Although foundations have an additional year to meet the minimum distribution requirement, most foundations make the required payout in the year it is generated (by estimating their year-end assets). Foundations that wait to make their payout in the subsequent year can be caught off guard by precipitously declining assets. If it’s nearing year’s end and... Read More