The Council's Legal Resources team provides trainings, publications, and resources to help you stay up to date on foundation operations and legal compliance. Our staff includes attorneys with experience in nonprofit and tax law who understand the unique legal and compliance issues facing community foundations. Our staff counsel are here to help you by advising on matters related to your organizational structure and governance, compliance, fundraising, self-dealing, and other legal matters.

There are community foundation specific legal resources available on our website, including answers to the most frequently asked member questions on donor-advised funds, endowments, global and domestic grantmaking, fundraising, scholarships, impact investing, planned gifts, and IRA distributions. In addition, we offer sample templates for the most common legal needs, such fund agreements and gift acceptance policies. Our attorneys may review Council member fund agreements and may offer edits and feedback. We also publish legal guidance and offer webinars and analysis on developing legislation relevant to the philanthropic sector.

Legal Question of the Month – May 2025
Variance Language for Agency Pass-thru Funds

Question
Our fund agreements all include variance language but recently, a nonprofit museum (with multiple funds and significant assets invested in our community foundation) shared reservations about our ability to redirect the use of their funds. It made me wonder if variance language is necessary on agency pass-thru funds which appear as a liability on our books and an asset to the nonprofit.

Answer from Staff Counsel
Your community foundation should have variance power language on all funds that it holds, even agency funds. Although the agency (like the nonprofit museum in this case) creates the fund and the assets will ultimately be redistributed to the agency, the assets are the legal property of your community foundation. Variance power is only appropriately used where the circumstances surrounding the original gift have changed. Members may find it helpful to review this chapter of our Mastering Foundation Law resource. Please don’t hesitate to reach out with any follow up questions.

Council members are encouraged to send any legal inquiries to legal@cof.org.

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Council members get unlimited access to legal services and free access to our longer publications, like the Compendium of Legal Resources. Members also have access to the Philanthropy Exchange, our online community where members can pose questions to peers.

Legal Matters for Community Foundations

The Council offers Legal Matters workshops to address the broad legal and practical questions faced by community foundations. These sessions cover topics such as administering funds, grants, and community foundation activities. They are designed to be interactive, allowing participants to engage in discussions and deep dives into specific legal complexities.

An Overview of the Law Governing Community Foundations

This chapter of Mastering Foundation Law provides a comprehensive legal guide for community foundations. It covers federal tax laws, state-specific regulations, and the common legal characteristics of community foundations. This resource is essential for understanding the legal framework that governs community foundations.

Accepting Cryptocurrency as Charitable Contributions

This publication will help community foundations navigate questions and concerns around receiving cryptocurrency as charitable contributions. Get comprehensive, state-by-state information on how your foundation can process any of the 6,000-and-growing cryptocurrencies that may be gifted.

Legal Disclaimer

All information on this website, and all publications, articles, email correspondence, and telephone consultations provided by Council attorneys and legal staff are intended for informational purposes only and not as part of an attorney-client relationship. Council attorneys are not licensed in every state and cannot provide legal representation. This information is not a substitute for expert legal, tax, or other professional advice tailored to your specific circumstances and may not be relied upon for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Council members may email legal@cof.org with inquiries and for more information.

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