A private foundation can pay family members reasonable compensation for reasonable and necessary services to the foundation as an exception to the private foundation self-dealing rules. Reasonable Compensation The IRS defines reasonable compensation as the amount typically paid for similar services in similar circumstances. There’s no exact formula, but consider the foundation’s size, grants, methods,... Read More
Yes. According to federal tax law, reasonable administrative expenses related to a foundation’s charitable activities can count toward the 5% requirement. This includes: Examples of Qualifying Expenses: Staff salaries, insurance, training, travel, rent Reasonable site visit expenses Other Qualifying Distributions: Most grants for charitable purposes (to public charities, noncharities, and eligible individuals like scholarships) if... 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
Declining a grant request is never easy, but it can be handled thoughtfully and constructively. Our Sample Documents Library includes declination letter templates from fellow Exponent Philanthropy members, which you can download and adapt for your needs. You may also find this foundation’s Guidelines for Saying No helpful. Additionally, these two blogs share how the... Read More
There are no restrictions on matching gift programs, although, to streamline the process, Exponent Philanthropy members typically choose to match gifts to public charities. Here are how several members structure their programs: We have a matching policy for our trustees and staff. It is budgeted as part of our grants budget. Our foundation matches up... Read More