In 1964, Congress enacted mandatory distribution rules to prevent private foundations from receiving gifts and investing the assets—yet never spending funds for charitable purposes. Congress thought it unfair to allow a charitable deduction when, in some cases, funds were not being directed to charity. A private foundation must make annual charitable expenditures, called qualifying distributions, equal... Read More
It’s December and your foundation wants to fulfill its payout requirement within the calendar year. What can you do? Ask your local community foundation, association of grantmakers, or giving circles for information about community needs and nonprofits they support. Consult with members of the faith community. Ask your government social services agencies, United Way, or... Read More
Although attending fundraisers and similar events may not seem like a benefit to you, the Internal Revenue Service (IRS) may see it differently: as self-dealing, an act in which a trustee, staff member, or other “disqualified person” receives direct, personal benefit. To avoid falling afoul of laws to prevent self-dealing, many private foundation boards establish... Read More
Private foundations are subject to a range of legal regulations. The following list is not comprehensive but provides a sense of the scope of laws that apply to private foundations. Laws that apply to private foundations and public charities General legal requirements Fiduciary duties Conflicts of Interest Private inurement and public benefit Records and disclosures... Read More
The Form 990-PF is often the public face of your foundation. It is publicly available at www.guidestar.org. Embedded in the Form 990-PF is a series of oft-neglected questions that give you an opportunity to explain how your charitable activities advance the foundation’s mission and vision. Instead of using the two or three lines provided on the... Read More
Amounts that foundations set aside or save for specific projects may be treated as current qualifying distributions. To qualify, the foundation must satisfy the Internal Revenue Service (IRS) rule that the amount set aside for a specific project be paid out within 5 years, and that the set-aside amount is appropriate because the project can... Read More