Legal Compliance Guidance

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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. 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 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.

Displaying 97 - 112 of 171 results

Scholarship Funds and PPA Compliance

Legal Compliance Guidance
Bringing Funds Into Compliance The Pension Protection Act of 2006 (PPA) includes the first comprehensive regulation of donor-advised funds. For the first time, donor-advised funds are legally defined. The legal definition is important for grantmakers that operate various kinds of component funds,…

Prohibited Benefits from Donor Advised Funds

Fundamentals, Legal Compliance Guidance
Donors and advisors are prohibited from receiving more than incidental benefits from grants made from their advised funds. Penalties apply to those who received a prohibited benefit, to those who recommended the grant, and, in some situations, to fund managers who approved the recommendation.…

Tax Reporting for Organizations that Hold Donor-Advised Funds

Legal Compliance Guidance
If our organization holds donor-advised funds, what information must we provide on Form 990? A sponsoring organization, such as a community foundation, must disclose on Schedule D, Part I of its 990 the following information: Number of donor-advised funds owned; Aggregate value of assets held…

Intermediate Sanctions for Donor Advised Funds and Sponsoring Organizations

Fundamentals, Legal Compliance Guidance
The Pension Protection Act of 2006 created new categories of disqualified persons for donor advised funds and sponsoring organizations under the intermediate sanctions rules. Categories of Disqualified Persons Created under the PPA Donors and donor advisors with regard to transactions with the…

Excess Business Holdings Rules for Donor Advised Funds

Legal Compliance Guidance
Under the Pension Protection Act of 2006 (PPA), the private foundation excess business holdings rule applies to donor-advised funds as if they were private foundations.1 That is, the holdings of a donor-advised fund in a business enterprise, together with the holdings of persons who are…

Council Summary: Congressional Research Service Report on Donor-Advised Funds

Legal Compliance Guidance
The Congressional Research Service issued a 2012 report on charitable giving and donor-advised funds. Using data from Form 990, the report updates to 2008 some of the statistical information about donor-advised funds that was included in the 2011 Treasury report on donor-advised funds. However, the…

Donor-Advised Fund Flowchart

Legal Compliance Guidance
This handy flowchart can help you determine which funds should be classified as donor-advised under the Pension Protection Act of 2006. Remember, a fund is only a donor-advised fund if: A donor or person appointed or designated by the donor has, or reasonably expects to have, advisory…

Attracting Contributions from Private Foundations

Legal Compliance Guidance
The legal and tax implications for community foundations accepting donations from private foundations, and qualifying distributions of taxable expenditures. Additional insight into converting a private foundation into a supporting organization of a community foundation.

Substantiating Contributions to Donor-Advised Funds

Legal Compliance Guidance, Fundamentals
What requirements must our foundation follow for substantiating contributions to donor-advised funds? To claim a charitable, gift or estate tax deduction for any contribution to a donor-advised fund, donors must obtain a contemporaneous written acknowledgement from the sponsoring organization that…

State Charitable Solicitation Compliance

External Resource, Legal Compliance Guidance
Most states have registration and/or reporting laws that apply to nonprofit organizations soliciting contributions within the state. Information about registration is available through individual states or the Multi-State Filer Project.

Conducting a Raffle Fundraiser

Legal Compliance Guidance
Community foundations occasionally consider conducting a raffle as a way to raise money for a particular fund. The plan may be to do a raffle as a standalone fundraiser or as part of another community foundation event. In many cases, donors approach community foundations asking to conduct the…

Rules Governing Non-Component Funds

Legal Compliance Guidance
Historical background of non-component and donor-directed funds.

FAQ: Agency Endowment Funds

Legal Compliance Guidance, Fundamentals
What is an agency endowment?  What types of organization can establish an agency endowment at a community foundation? When a public charity establishes an agency endowment at a community foundation, which organization owns the contributed funds? Since the agency is releasing legal…

IRS Publication 4302: A Charity's Guide to Car Donations

Legal Compliance Guidance, External Resource
Types of car donation programs and their impact on tax-exempt status, taxable income, and deductible contributions.

Gifts of Tangible Personal Property

Legal Compliance Guidance
A donor is considering starting a fund at the community foundation using a piece of jewelry instead of a cash gift. The jewelry cost her $1,000 (35 years ago) and is now worth $20,000. May the community foundation accept the gift? What documentation must the community foundation prepare? From the…

Gifts of Property: What to Know Before You Say Yes

Legal Compliance Guidance
There is always the temptation, particularly among newly established community foundations, to accept any type of contribution. When a contribution consists of property other than cash, however, it must be determined if it is in the community foundation’s best interests to accept such property. Are…

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