Community Philanthropy Update - May/June 2023

Thursday, June 1, 2023 - 5:04 pm
Natalie Ross
Community Philanthropy Update - May/June 2023
Community Philanthropy Update

Greetings Friend,

It’s already June, which means we’re in the midst of graduation season. One thing is on the mind of many community foundations: scholarships. Granting scholarships is one of the key ways foundations support their communities, helping young people take exciting next steps in their lives.

If you have questions about starting or administering your foundation’s scholarship program, the Council’s legal team has an FAQ that covers the basics. Council members can also ask the legal team their questions directly by emailing

At the Council, we are closely watching developments related to scholarships in Congress and an upcoming Supreme Court decision:

  • Recently, Senator Peters (D-MI), Rep. LaHood (R-IL), Senator Capito (R-WV) and Rep. Sewell (D-AL) have reintroduced the Workforce Development through Post-Graduation Scholarship Act to make it easier for place-based foundations to award post-graduation scholarships. This tool has the potential to both help recent graduates pay their student loans while also encouraging those same graduates to live and work in underserved communities where their skills are needed. Check out the Council’s webpage for opportunities to show your support for the bill, as well as additional resources to learn more about this legislative priority.
  • We are also monitoring two cases – Students for Fair Admissions (SFFA) v. Harvard and SFFA v. University of North Carolina (UNC) – the Supreme Court heard last October. While we don’t know what the Court’s opinion will say or when the opinion will come out this month, the Council’s legal team has been talking with partners and other stakeholders to understand the potential impact on the sector. Check out our recent blog on this topic.

Congratulations to the class of 2023!


Natalie Ross

Natalie Ross
Vice President of Membership, Development, and Finance

Upcoming Events

Council Events

Community Foundation CEO Roundtable

June 7 | Virtual

Community foundation executives are invited to join a peer roundtable conversation on strategies to cultivate and retain local community wealth.

Philanthropy Supporting Ukraine

June 8 | Virtual

Join this roundtable discussion on how philanthropy can support the ongoing and widespread relief, recovery, and rebuilding efforts as a result of Russia's war on Ukraine.

Legal Matters for Community Foundations Workshop

June 12 | LL23 Pre-Session | Denver, CO

Led by the Council on Foundations Legal Team, this workshop is flexibly organized to ensure that your broad legal questions for administering funds, grants, and community foundation activities are addressed. The legal team will provide technical and practical understanding of complex rules and regulations. You can register for this session even if you're not registered for Leading Locally 2023.

Public Policy Action Network

June 26 | Virtual

Join this members-only interactive and informal virtual meet up for the Public Policy Action Network. In this meeting, we'll share legislative updates and invite your questions about recent developments in public policy for grantmakers.

National Standards Monthly Zoom Session

July 12 | Virtual

This monthly call is for community foundations staff to connect with the National Standards staff and to ask questions related to the National Standards program.

Community Foundation Excellence Fundamentals Course

July 19-20 and 26-27| Virtual

A well-trained staff and an informed board are critical to the success of community foundations in our fast-changing world. This course helps new and growing foundation stakeholders build the essential skills they need to balance governance and management with a broader understanding of community foundations within the philanthropic sector.

Virtual Meet-Up: Community Foundation Donor Services

July 26 | Virtual

Join this interactive and informal virtual meet-up for all community foundation staff who are philanthropic advisors or involved in donor stewardship.

Legal Matters for Community Foundations

August 16-17 | Virtual

Led by the Council's legal team, this workshop is designed to answer your broad legal and practical questions on administering funds, grants, and community foundation activities.

New Member Spotlight

Welcome to the community foundations that have joined as new Council members since our last newsletter! We're excited to have Four Way Community Foundation, Greater Lynchburg Community Foundation, and Northern Chautauqua Community Foundation as new members.

Four Way Community Foundation Greater Lynchburg Community Foundation


Northern Chautauqua Community Foundation



Resources & New Stories

2023 Study of Foundations

Add your voice to the 11th annual Council on Foundations-Commonfund Study of Foundations (CCSF), our sector’s premier tool for benchmarking investment performance, asset strategies, and return data to ensure philanthropy’s ongoing health!

The CCSF does more good the more good data it gets, and we look forward to including your foundation’s data in this year’s research by the June 5 deadline. If you have questions or need help, contact Allison Kaspriske at Commonfund Institute.

Legal Question of the Month with Ben McDearmon, Director of Legal Resources

Question: Is it permissible for a community foundation to make scholarships available to the children of foundation staff or board members?

ben-mcdearmon-2018-500x500Answer: While many community foundations adopt policies that make foundation staff or board members (or their dependents) ineligible to receive scholarships, that’s not necessarily a legal requirement.

Legally, the primary concern with allowing foundation board, staff, or members of their families to receive scholarships is that it could result in an excess benefit transaction under IRC section 4958 if the recipient is a “disqualified person” with respect to the foundation. While all board members are considered disqualified persons, that isn’t the case for all employees—only those who were in a position to exercise “substantial influence over the affairs of the organization” during the preceding 5 year period are considered to be disqualified persons. That means most foundation staff outside of senior leadership positions are likely not disqualified persons and there should be no excess benefit concern.

In addition, the Treasury Regulations at section 53.4958-4(a)(4)(v) suggest that even a disqualified person may receive certain grants from a charitable organization without creating an excess benefit transaction as long as the grants are awarded to the disqualified person solely because they are a member of a charitable class served by that organization. This likely means that a disqualified person who is a member of the charitable class served by a scholarship fund and who meets all of the fund’s other criteria could receive an award without issue.

That being said, it’s essential that no person who participates in the selection process is in a position to benefit from their actions, so staff or board members who serve on a selection committee must recuse themselves from that year’s process if a family member is under consideration. Many community foundations also want to avoid the potential public impression that foundation insiders are receiving preferential treatment. For that reason, it may still make sense to restrict eligibility for board and staff even though it isn’t legally required.

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.

Philanthropy Exchange Conversations for You

News and Resources

Keep in Touch!

Share your organization’s impact story with us at

View this email as a web page.

Shared purpose. Collective voice. Greater impact.

Share on FacebookShare on TwitterShare on LinkedInShare on all
Community Philanthropy Updates