Resources You Can Use
Legal Question of the Month with Remy Barnwell, Staff Counsel
Question: Hello – we very much appreciated the briefing “Considerations for Working with NIL Collections” you published in the past year. We were hoping that you could provide affirmation on the actions we have taken with donor-advised fund recommendations to our big NIL collective nearby. They have organized with both a for-profit side and a nonprofit side, classified as a public charity.
At this point, our thought is that we would be willing to make a grant for a specific purpose that was charitable according to the IRS definition, but that would not include events raising money for or to directly pay specific student athlete groups. Would it be advisable to not allow DAFs for general support and/or events that benefit private individuals (such as paying a certain group of athletes) now as we are currently doing?
Answer: I’m glad that you have found our piece on “Considerations for Working with NIL Collectives” helpful in your work. I do suggest limiting distributions to those that serve a clearly defined charitable purpose. I would advise against general support grants or grants that are clearly earmarked for individuals of a particular sports team because donor-advised funds may not make distributions to individuals under any circumstances. You want to ensure that any distribution made clearly furthers a tax-exempt, charitable purpose.
If you grant for a specific charitable purpose, it is enough to state that in the grant agreement. I don’t recommend continuing to make any grant that isn’t for a clearly charitable purpose, regardless of the organization’s tax-exempt status. Please don’t hesitate to reach out with any follow up questions you may have.
Council members are able to send their questions to our legal team for expert advice and analysis. You can take advantage of this member benefit by becoming a member today.
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Inform Your Operations with CF Insights Benchmarking
Did you know that there’s a rich, growing dataset reflecting the operations of community foundations across the country that’s available to search anytime? With hundreds of community foundations participating in the CF Insights Annual Survey each year, you can find a relevant peer group to help you make informed operational decisions. Search using over 100 criteria including asset composition, staffing allocation, revenue mix, and many more to discover your peers and download comparative reports.
Want to learn more? Visit cof.org/cfinsights, email cfinsights@cof.org, and join us on September 18 for a walk-through of CF Insights to learn how to put the platform to use at your foundation.
Retreat for New Community Foundation Executive Leaders
Are you a community foundation executive who is new to your role? Join your peers at the San Francisco Foundation on October 16-17 for our new executive leaders retreat, which will equip early-tenure community foundation executives with the skills and relationships needed to be successful. We'll cover the work of navigating change and staff expectations, business model innovations, and building institutions for the future. The New Executive Leaders Retreat is intended for executive leaders (CEOs, Presidents, Executive Directors) of mid- and large-sized community foundations who have been in their role for four years or less. Register today.
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