Rules, regulations, and legal documents

How long should a foundation keep grantee reports?

Posted on February 19, 2016 by Andras Kosaras, James P. Joseph

Are there legal requirements, IRS or other, for foundations regarding receiving and retaining paperwork from grantees that documents how grant dollars were spent? A good rule of thumb is to keep grant materials for seven years. We suggest four years at a minimum. The IRS audit statute of limitations is three years. So, it is important to keep grant materials… Read More

Are there any lobbying red flags to look out for in final grantee reports to our foundation?

Posted on February 18, 2016 by Andras Kosaras, James P. Joseph

Are there any lobbying red flags to look out for in final grantee reports to our foundation? The foundation should look at grantee reports for lobbying flags or electioneering flags. If grantees are not following the rules it is better to know sooner rather than later. This way it can be corrected going forward. For more information, see The Rules… Read More

Naming Recognition: Is it ok to name a building after donors rather than the foundation?

Posted on February 18, 2016 by Andras Kosaras

Our foundation, the Hearts and Hopes Foundation, provided a grant to a new research facility at a local university. The university has suggested naming the facility after our donors: i.e., the “John and Mary Smith Research Center.” Is this okay or do we have to name it the “Hearts and Hopes Foundation Research Center?” We want to ensure we are… Read More

Recusals: When Should Board Members Excuse Themselves?

Posted on February 18, 2016 by Andras Kosaras, James P. Joseph

If five out of our six board members are on another board of a non-profit, how do we make grants to that non-profit without a majority vote? What are the rules on recusals? This is a little tricky but the members are not required to recuse themselves as long as everyone discloses their relationship with the non-profit. However, if five… Read More

How should a foundation deal with a obvious self-dealing situation if it was set up by our legal counsel?

Posted on February 16, 2016 by Andras Kosaras, James P. Joseph

If a family foundation’s attorney designs an obviously self-dealing relationship on behalf of one of the foundation’s trustees, and with the awareness and participation of all of the other foundation trustees, does the foundation remain free of liability for taxation or penalty, simply because legal counsel designed and approved the relationship? Is there any legal accountability on the part of… Read More

Is it self-dealing to attend a gala representing our foundation?

Posted on February 15, 2016 by Andras Kosaras, James P. Joseph

I have a self- dealing question. Our family foundation is being honored by one of our grantees at their upcoming gala. I have read that attending the gala under such circumstances is considered official foundation business. However, if the foundation purchases tickets for staff and board members to attend the gala, or sponsors a table, does the foundation need to… Read More

Planning for an Influx of Assets

Posted on September 10, 2015 by Tara Brown, Katherine Lorenz, Elaine Gast Fawcett

An influx of assets—whether sudden or expected—is a powerful transition point in your family’s philanthropy. With rising resources comes the budding potential to do more of what you’re already doing: making a difference according to your foundation’s mission. For family foundations—particularly those for whom the influx comes as a complete surprise—a change in asset size can feel downright disorienting. … Read More

Can We Make Grants to a Non- 501(C)(3) Organization?

Posted on September 9, 2015 by Andrew Schulz

The short answer is, absolutely. Foundations are allowed to make grants to non-charities. They have to follow special procedures under Section 4945 that are called expenditure responsibility. The basic rule is that the fund have to be used for charitable purposes, not something else, but you can grant to 501(c)(4)s, 501(c)(6)s, and even for-profits, as long as you follow the… Read More

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