Rules, regulations, and legal documents

The Better Boardroom: a Complimentary Lunch Seminar for Giving Families (Chicago)

Posted on February 25, 2015

Family foundations are a breed apart. The impact of family structure and dynamics on how a foundation is governed is enormous and consistently underestimated.  Join us for an overview of how to truly integrate the family into family foundation governance.   The program will cover these essentials: Forgotten factors – how family dynamics, family size and family structure should guide decisions… Read More

Can a direct descendant who is on the board bring non-family members on to the board to work for him or her?

Posted on December 11, 2014 by Andrew Schulz

You’d have to check the bylaws and what the procedure is. Who and who can’t serve on the board is a matter of foundation policy. There’s no law that prevents non-family members from being on the board, but you should be very careful to observe the rules and policies set forth in your bylaws or your articles about the election… Read More

May Our Board Pay a Disqualified Person for Services Such as Portfolio Management?

Posted on December 11, 2014 by Andrew Schulz

May our board pay someone for portfolio management if they are an employee of a company owned or led by a board member and direct descendant of the foundation’s father? Yes, even if the individual being employed to do that work is a disqualified person, paying someone reasonable and necessary compensation to manage the assets of the foundation, regardless of… Read More

Is it Self-Dealing to Give a Grant to a Specific Child’s Tuition?

Posted on December 11, 2014 by Andrew Schulz

A trustee wants to give a grant for their child to attend a private school. The trustee then instructs the school, a legal 501(c)(3), to apply to the foundation for a scholarship grant that will be applied to the specific child’s tuition. Is this self- dealing? This is self-dealing. You’re absolutely prohibited from making a payment that would be earmarked… Read More

Can the Foundation Pay Rent to the Family Office?

Posted on December 11, 2014 by Andrew Schulz

The foundation may not pay rent to the family office, because the family office is considered a disqualified person, and that’s not a personal service. However, a foundation and a family office can share office space, provided that the person to whom the foundation is paying rent, i.e., the landlord, is not a disqualified person. So, if it’s a third-party… Read More

Toeing the Line: Legal Pitfalls in Family Foundation Governance

Posted on December 11, 2014 by Andrew Schulz

Should we accept those tickets to the opening of the new local theater that just arrived in the mail? Can our family office charge our foundation for rent? Is it o.k. for us to pay Uncle Bob to manage the foundation’s investment portfolio? Can we make a grant to our family's donor advised fund to help make year-end payout requirements? … Read More

Are There Any Regulations on Gifts That Are Accepted by Family Members?

Posted on December 11, 2014 by Andrew Schulz

Are there any regulations on gifts that are accepted by family members? Should we not accept restricted gifts, for instance? You have to be careful about closely held business interests because of the restrictions on self- dealing and who you can sell them back to. There are no laws that explicitly prohibit certain gifts. Restrictions, if they’re for a particular… Read More

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