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.

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Rules of Advocacy & Lobbying: Private Foundations

Legal Compliance Guidance
The rules of advocacy and lobbying for private foundations differ somewhat from community and public foundations. As a private foundation, the law allows the following: Advocacy Lobbying Funding Lobbying Advocacy Yes, private foundations may engage in advocacy activities as described under…

Dos and Don'ts of Contact Between Company Foundation Employees and Legislators

Legal Compliance Guidance
Companies and their private foundations must carefully navigate the dos and don’ts of contact between foundation employees and legislators. How should the company foundation's grants and activities fit into the sponsoring company's efforts to develop strong relationships with government officials…

Sample Conflict of Interest Policy

Legal Compliance Guidance
Editable conflict of interest policies for staff and board members. This sample document is being provided for informational purposes and is not to be shared without the permission of the Council on Foundations. Use of the sample document does not create an attorney-client relationship, and the…

Conflicts of Interest and Form 1023

Legal Compliance Guidance
Ordinarily, established private foundations and public charity grantmakers would ignore the IRS's revision of Form 1023, Application for Recognition of Exemption from Federal Income Tax. After all, these groups have already received their determination letters. But the revised Form 1023 and the…

Conflicts of Interest: Dealing with Foundation Investments

Legal Compliance Guidance
This article focuses on conflicts of interest around foundation investments. May foundation board members (or other closely affiliated individuals or businesses) manage foundation investments? May they be paid for this service? What factors should foundation managers consider before they select an…

Can a Foundation Lawyer Serve as a Foundation Trustee?

Legal Compliance Guidance
This article explores one of the more common questions about conflicts of interest: May the foundation's lawyer serve as a trustee? Foundation Lawyer/Trustee Often, the lawyer who drafted a foundation's organizing documents stays on as counsel to the organization. He or she may be asked to serve…

Council-Endorsed D&O Insurance Program

Legal Compliance Guidance
Directors & Officers liability insurance provides financial protection for a foundation and its directors, officers, employees, and volunteers in the event of a lawsuit. Does your foundation need D&O insurance? A foundation doesn't have to be in the wrong to be sued. D&O insurance…

Nonprofit Mergers

Legal Compliance Guidance
A look at some of the legal and non-legal aspects of merging one charitable program or organization with another. Ray S. Munney, executive director of the Zenith County Community Foundation, had three meetings scheduled Tuesday morning. The first was with the new manager of a local corporation's…

Guidance on Closing a Private Foundation

Legal Compliance Guidance
There's more to closing down a private foundation than packing up and turning off the utilities. Here are some questions, considerations, and IRS directions. Sometimes it is time for a private foundation to disappear—assets may have dwindled significantly or family members no longer share a…

Creating an Inactive Funds Policy

Legal Compliance Guidance
Imagine the following scenarios: A donor advisor has not made a recommendation from a donor advised fund for two years. An agency has requested that your community foundation not make a distribution from an agency endowment until the agency requests a distribution at some point in the future.…

U.S. Foundation Employment and Payment of Foreign Nationals and Students

Legal Compliance Guidance
Over the past decade or so, economies have become more global and the tools for communicating news from around the world have become more effective and timely in reporting global events via the internet, video and text messaging, Twitter, and Facebook, to name but a few of these tools. Foundations…

Component Funds: The Absence of Material Restrictions

Legal Compliance Guidance
This document outlines the basics of component funds, field of interest funds, donor-advised funds, and restrictions around these funds.

Intermediate Sanctions Regulations Checklist

Legal Compliance Guidance
The intermediate sanctions rules prohibit tax-exempt organizations from providing more than fair market value economic benefits to their “disqualified persons.” The intermediate sanctions rules apply to all section 501(c)(3) and section 501(c)(4) organizations except for private foundations, which…

Covering Travel Expenses of Family Members

Legal Compliance Guidance
The Stewardship Principles for Family Foundations encourage foundations to provide orientation and training for new board members and professional development for existing board members and staff. They also encourage planning for leadership continuity through activities that identify, educate and…

Pros and Cons of Sharing Board Members With Grantees

Legal Compliance Guidance
What do you do when a grantee—or potential grantee—asks someone on your board or staff to sit on their board? Does such a request constitute a conflict of interest? Are there times when such a situation can actually benefit one or both of the organizations involved? Let’s look at some of the pros…

Tangible Benefits Resulting from Grants

Legal Compliance Guidance
In the May/June 1998 issue of Foundation News & Commentary, Jane Nober wrote "That's the Ticket"  about using foundation funds to pay for tickets to fundraising events. Six years later, questions about tickets and other tangible benefits paid for by the foundation are still among the most…

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