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Lawyers rarely tell foundation managers, "Relax, don’t worry so much!" But in the case of "tipping," that’s been our advice for more than 10 years. What is the so-called "tipping problem" and why are so many foundations (still) so worried about it?   Tipping occurs when a private…

After September 11, 2001, many grantmakers and other charitable organizations that were not previously familiar with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), learned of its existence. As one of the key U.S. government agencies seeking to shut down terrorism funding…

In an effort to ensure that charitable resources are used exclusively for charitable purposes and not used to support terrorist activity, organizations may choose to adopt practices in addition to those explicitly required by law. Among the practices that some charities choose to adopt is including…

Aligning private foundation grantmaking procedures with PPA requirements The Pension Protection Act of 2006 (PPA) brought many changes to the charitable sector. The most significant changes for private foundations are the rules for making grants to certain kinds of supporting organizations. While…

Can we back out of a multiyear commitment we made in a prior year because our foundation’s assets have declined? The answer in many cases is “no.” That is, unless your grantee is willing to release your foundation from its obligation. Generally, an unconditional, multiyear grant is considered a…

With a little caution, community foundations can support the charitable activities of non-charities. A chamber of commerce requests a grant to start a computer-training program. A gardening club asks for money to cover a local beautification project. A cemetery association seeks support for…

Question: May a private corporate foundation or corporate giving program make a grant to a newly-established charity that has not yet received its IRS tax exemption letter? Answer: Yes, but when making a grant to a charity whose application for exempt status is pending before the IRS, a private…

Generally, there is no legal restriction against making grants to churches, synagogues, mosques or other religious institutions. But there are some things foundations interested in such grantmaking should know. For years, private foundations and public charities have recognized religious…

Family foundations use discretionary grantmaking to achieve a variety of purposes. Discretionary grantmaking allows some foundations to avoid strife by giving each branch of the extended family a sum of money that it can think of as its own to control. For others, a discretionary fund provides…

Everything you need to know to stay out of trouble with third-party representatives. Does hearing the sentence "Just make that grant check payable to my fiscal agent" stop you in your tracks? It should. If your potential grantees are washing your grant funds through an accommodating charity that…

Can a 501(c)(3) organization with a donor advised fund at a community foundation make a distribution to itself? Unfortunately, when the law changed under the Pension Protection Act of 2006, this was left unclear. Intermediate sanctions rules prohibit grants and similar payments to donors from a…

Gifts from private foundations to field of interest funds, designated funds, and other funds that are not donor advised, are entirely permissible and do not raise special concerns. Gifts to a donor-advised fund can raise red flags as a potential donor control issue. The law does not prohibit gifts…

When donors to scholarship funds see the impact that their money can have on the life of a student, they are often inspired to contribute more. Sometimes they will add more to the principal of the fund so that future awardees can receive bigger scholarships or more scholarships can be awarded.…

Responding to requests from the Council on Foundations and Independent Sector, the Internal Revenue Service on December 4, 2006 issued interim guidance on several of the donor-advised fund issues arising from the Pension Protection Act of 2006. The IRS notice is available at http://www.irs.gov/pub/…