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.

Expanded Legal Support

After listening, research, and consultation with the field, the Council on Foundations is expanding legal support to help community foundations prepare for—and respond to—threats that could shape the future of the sector. The Council is working to expand our legal resources to provide additional analysis, guidance, and tools that help organizations prepare for potential new scrutiny.

Expanded Legal Support

Legal Question of the Month

Legal Question of the Month – June 2025
Employer-Related Scholarship Requirements

Question
We have a company that would like to create a scholarship fund for the employees of the company that are going on to college. Is this a sufficient size pool? Can return to work each summer be used as a requirement for multi-year scholarships?

Answer from Senior Staff Counsel
As an initial matter, it’s important to note that employer-related scholarships (i.e., scholarships where the recipients are limited to either employees or children of employees) have special rules that govern their distribution. The size of the pool of potential recipients does matter but only after other criteria are met. The availability of the scholarship has to fall outside the pattern of employment — meaning continued employment cannot be a requirement of distribution, the grants may not represent compensation for future or past services, and the grants may not limit recipients to undertake studies or research primarily for the benefit of the employer.

So, the fund cannot require recipients to return to work each year for multi-year scholarships. The recipient’s studies also may not be limited to paying the apprenticeship fee or limiting the studies recipients undertake to only include those which benefit the company. Once those and a few additional requirements are met, then there is a percentage test for employer-related scholarships that are distributed to employees. In any given year, the percentage awarded may not exceed more than 10% of the (i) individuals who were eligible, (ii) actually applied, and (iii) were considered for the scholarship.

You may find the Mastering Foundation Law chapter on Scholarships helpful when answering some of your questions.

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

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Sample Documents

Sample Documents and Templates

Donor Advised Funds

Donor-Advised Funds (DAFs)

Scholarship Funds

Scholarship Funds and PPA Compliance

Legal FAQs

Frequently Asked Questions

Get more with Membership

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.

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View all Legal Resources for Community Foundations

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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.

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Warren County Iowa

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.

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Louisville KY

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.

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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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