As a benefit of membership, the Council on Foundations attorneys and legal staff provide information and education to Council members regarding a variety of topics related to foundation operations and legal compliance. All information on this website, and all publications, articles, e-mail 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. The 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 purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.
Corporate Foundation Grants to Government
Legal Compliance Guidance
Question: May corporate grantmakers make grants to units of government such as public schools or local parks departments?
Answer: Yes, both corporate giving programs and corporate foundations may make grants to units of government as long as the grants are restricted to charitable purposes.
What…
Corporate Foundations and Grants to Non-Charities
Legal Compliance Guidance
Question: May our corporate foundation or corporate giving program provide a grant to an organization that is not a charity?
Answer: Yes, but the process required to make a grant to a non-charity depends on the type of corporate giving vehicle used to make the grant. Private foundations must…
Grantmaking Options for Corporate Philanthropies
Legal Compliance Guidance
Question: We are trying to decide how to structure our grants programs between our direct-giving program and our corporate foundation. Are there any general guidelines to help us?
Answer: Many factors influence how to allocate grantmaking programs between a corporate giving program and a…
Funding a Dissolving Nonprofit
Legal Compliance Guidance
Question: Our foundation has been funding a local nonprofit for the last ten years. The nonprofit has one full-time employee and an annual operating budget of about $300,000. The nonprofit recently requested a $50,000 grant for operating expenditures or it will have to close down immediately. Even…
FAQ: Fiscal Sponsors
Legal Compliance Guidance, Fundamentals
We just received a grant request from a group that is not a public charity. The request states that the group has a “fiscal sponsor” and the grant agreement is countersigned by the fiscal sponsor? Can we make this grant?
Yes. A grant to a public charity serving as a fiscal sponsor is treated like…
Establishing a Scholarship Fund for Corporate Employees
Fundamentals, Legal Compliance Guidance
Question: Our corporate foundation is planning to establish a scholarship fund for our employees' children. What do we need to keep in mind and what steps do we need to follow to ensure we are complying with the legal requirements?
Response: The granting of scholarships, fellowships, and…
Discretionary Grants by Corporate Foundations
Legal Compliance Guidance
Question:May a corporate foundation allow corporate board members who do not sit on the foundation’s board to designate grants from the corporate foundation?
Answer:No. All grants from the corporate foundation must be approved by the corporate foundation’s board of directors. No individual—…
Sample Disclosure and Confidentiality Statement for Staff and Board Members
Sample Document
You can use this document to guide the development of your disclosure and confidentiality statement for staff and board of directors.
Corporate Disclosure and the Sarbanes-Oxley Act of 2002
Legal Compliance Guidance
What is the Sarbanes-Oxley Act?
The Sarbanes-Oxley Act of 2002 was designed to rebuild public trust in the corporate community in the wake of the Enron scandal and other corporate and accounting scandals. Sarbanes-Oxley requires publicly traded companies to adhere to governance standards that…
Calculating the Five Percent Payout
Legal Compliance Guidance
What is the five percent payout requirement?
Each year, every private foundation must make eligible charitable expenditures that equal or exceed approximately five percent of the value of its endowment. The purpose behind the minimum payout requirement contained in Internal Revenue Code Section…
Accounting for Agency Endowment Funds Held at Community Foundations
Legal Compliance Guidance
Introduction
Nonprofits place their endowment funds with community foundations for a variety of reasons, including investment expertise, efficiencies, and access to planned giving advice and services. As nonprofit organizations seek to place their assets and partner with the foundation, questions…
How a Private Foundation Can Use "Friends of" Organizations
Legal Compliance Guidance
U.S. private foundations are increasingly involved in international grantmaking. One way for a private foundation to give overseas is to make grants directly to foreign charities. Many U.S. private foundations, however, may want to consider giving overseas indirectly through a "Friends of"…
Changing Supporting Organization Status
Legal Compliance Guidance
With tighter restrictions on grants to supporting organizations after the PPA, reclassifying into a public charity with fewer restrictions is an option worth considering.
Supporting organizations that meets the public support test can be reclassified as a public charity under section 509(a)(…
Council Summary: Report to Congress on Supporting Organizations and Donor Advised Funds
Legal Compliance Guidance
The Treasury Department released its report on donor advised funds (DAFs) and supporting organizations (SOs) in December of 2011. This report, mandated by the Pension Protection Act of 2006, was due in August 2007.
The report is 109 pages, including appendices, and is divided into five chapters:…
Treasury Report on Donor-Advised Funds and Supporting Organizations
External Resource
In Notice 2007-21, the Treasury Department and IRS requested comments on issues relating to the organization and operation of donor-advised funds and supporting organizations, to be included in a study of these organizations. The resulting report includes a detailed discussion of the legal…
990 Filing for Small Public Charities
Legal Compliance Guidance
Under the Pension Protection Act of 2006 (PPA), any organization that is not required to file Form 990 because it is a “small public charity” will be required to submit an annual 990-N report to the IRS. The IRS posted FAQ's with additional information about the filing requirement. A “small public…