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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.
Summary
A supporting organization qualifies as a public charity because it has a close relationship with another publicly supported section 501(c)(3) organization. Based on the relationship of the supporting organization to the public charity it supports, a supporting organization will be…
This chart outlines all provisions that affect the operations of supporting organizations.
Affected transactions: Returns filed for taxable years ending after August 17, 2006.
Are all supporting organizations required to file Form 990?
Yes. Prior to the enactment of the Pension Protection Act of 2006, public charities that normally received less than $25,000 in annual gross…
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…
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…
Question
The same company representatives serve on our company foundation board of directors and our Corporate Contributions Committee. Can we hold the meetings for both programs simultaneously?
Answer
No. While it is possible to hold the meetings for the corporate giving program and…
Question:
Can a company provide office space to the company foundation?
Answer:
A parent company can always provide the company foundation with office space as long as it does so free of charge. While it is even possible for the parent company and the foundation to share the cost of office…
Question: Why do Council on Foundations membership materials and invoices state that if my foundation and corporate giving program share a membership, dues must be paid by the corporation? Is this true for other memberships as well?
Answer: IRS self-dealing rules prohibit private foundations (…
A Chapter in Mastering Foundation Law:
The Council on Foundations Compendium of Legal Resources
This chapter discusses the federal tax laws governing supporting organizations. As a result of the Tax Reform Act of 1969, private foundations receive considerably less favorable treatment under tax…