Although all 501(c)(3) organizations are organized and operated exclusively for religious, charitable, or educational purposes, there are two main types of organizations that fall under this classification: public charities and private foundations. Organizations that qualify as public charities do so by having significant public influence, such as a third or more of their income’s coming... Read More
A key to completing or reviewing the Form 990-PF is to have the required source documents available and organized before you start—even if you are hiring someone to complete the form for you. Categorizing Expenses For easier access to what you need, it can be helpful to categorize expenses throughout the year as follows: Administration... Read More
A foundation must deposit all depository taxes (e.g., employment tax, excise tax, and unrelated business income tax) electronically using the Electronic Funds Transfer. Generally, such transfers are made using the Electronic Federal Tax Payment System (EFTPS). If the foundation has not yet used EFTPS, enrollment will be required. After the foundation’s information is validated with... Read More
Private foundations are subject to several sections within the Internal Revenue Code (IRC). The following list is not comprehensive but addresses eight sections that will guide foundation managers throughout the life of the foundation: Section 4940 imposes an annual excise tax on a private foundation’s net investment income. Foundations will need to pay taxes on... Read More
Exponent Philanthropy cannot offer sample bylaws—there are many state variations and characteristics and needs of individual foundations—but the following overview does describe common sections and what a foundation board might expect within its own bylaws: Name—In some states, the first section gives the name of the foundation or other similar details required by state corporate... Read More
Taxable expenditures are grants or expenditures made by a private foundation that are either prohibited, or in Internal Revenue Service (IRS)-specified areas without following the strict IRS rules. The following list provides brief descriptions of those expenditures that are completely prohibited; the list after that provides additional requirements to avoid being taxable expenditures. The following... Read More
