Military Aid: How Grantmakers Can Support Military Personnel

Americans may disagree about various aspects of war, but there is broad support for helping the men and women who are fighting in wars and the families they have left behind. Dedicated assistance groups are working to provide aid to military personnel and their relatives. This article surveys the different purposes for which charitable grants can be made and discusses the role that grantmakers can play in those efforts.

Supporting military personnel is a traditional charitable activity. Whether it is providing supplies or entertainment to active duty soldiers or making payments to family members of those who are killed or injured while serving, expenditures in those areas can serve the charitable purposes of lessening the burden on government or promoting patriotism. Addressing both the long- and short-term needs of military personnel will likely qualify as a charitable activity; a 1985 private letter ruling describes a private foundation that provided subsidized housing for certain relatives of honorably discharged military personnel.

Grantmaking to large groups of military personnel or their families can be a straightforward matter. A grant to a military unit is a grant to government and–so long as it is for an exclusively public purpose–requires no special procedures. This will be true whether the grant is a gift of cash or in-kind donations, such as care packages for soldiers. Funds may also be established at particular military bases or through other government institutions that may receive funds. Numerous public charities have experience with the military in this area and grantmakers may find that it is more efficient to work with an existing group than to establish a new fund or organization.

Numerous public charities also exist to provide benefits for the families of individuals in the military. They include organizations that run summer camps for children of parents deployed overseas and those that provide financial assistance to needy military families. Individuals, private foundations, corporate grantmakers and public charities, such as community foundations, can all make grants to those organizations as they would to any other public charity.

Due Diligence

Grantmakers should exercise the same care in dealing with charities in this area as they would in any other field. They should review a potential grantee's determination letter from the IRS to ensure that it has sought and received approval of its activities. It is always wise to examine an organization's recent tax filings on www.guidestar.org. If an organization does not have 501(c)(3) status or says that it is relying on a fiscal sponsor to process its funds, grantmakers should take extra care to ensure that funds are being spent for exclusively charitable purposes. It may be appropriate to determine that an organization that claims to work with the military does indeed have the endorsement and cooperation of the military and that the support that it provides is welcome.

Making grants to a small group of military personnel or their families raises more complicated questions. When a local soldier is killed, donors may be eager to help his or her family. Public charities, such as community foundations, should not establish funds for a specific family or a small group of families.

Remember that no income tax charitable deduction is available to individuals or corporations that make a gift of money or property to an individual. This is true no matter how needy or deserving of aid a person or family may be, and it remains true even if the donor channels the contribution through a charitable organization. Because the funds are earmarked for a particular individual or small group, the IRS is free to disregard the existence of the charitable intermediary and to consider the gift as made directly from one individual to another. (The Tax Code defines "earmarking" as any oral or written understanding that funds will be distributed in a specified fashion.) A community foundation that establishes a fund for a pre-identified person or small group would be accepting funds for which no charitable deduction is available and allowing donors to do indirectly what they cannot do directly.

Private foundations are subject to the same prohibition on making grants to pre-identified individuals.

If the group that donors seek to benefit is larger, however, it may constitute a charitable class and it may be appropriate for a foundation to establish a fund for its benefit. There is no magic number that makes a charitable class of sufficient size, but a class that is large and open (i.e., includes people who may meet its criteria in the future) will be more likely to meet the definition. Thus, depending on the size of a community foundation's geographic service area and the number of military families, a community foundation may well be able to establish a scholarship fund for the children of all individuals who have been on active duty in the military; a private foundation may establish a similar fund with preapproval from the IRS.

Grantmakers who wish to support military personnel have many options available. As with all grants, it is important to provide support in the most efficient and responsible manner possible.

Additional Resources

• U.S. Department of Defense Community Relations website.
  Lists groups providing aid for particular purposes.
• GuideStar
  Provides financial and operational information about charitable organizations.
• Nicole Lewis, "Charity's Homefront Operations," Chronicle of Philanthropy, September 1, 2005 (subscription required).
  This article and companion pieces survey the groups that are raising funds to support military personnel.