Legal Compliance Guidance

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 (…

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 space…

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 company…

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…

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)(…

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…

The Pension Protection Act of 2006 (PPA) has introduced filing requirements for split-interest trusts such as charitable remainder trusts and pooled income funds. Which returns are affected? These requirements apply to returns for taxable years beginning after December 31, 2006. What are the…

Under the Pension Protection Act of 2006 (PPA), the rules for public disclosure of the Form 990-T by public charities and private foundations became identical to those for Form 990. Which forms are affected? Any Form 990-T filed after August 17, 2006. What are the public disclosure requirements…

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 receipts…

This resource is a Council Summary of IRS Interim Guidance found in IRS Notice 2006-109, issued December 6, 2006, and explains steps for determining supporting organization status, and important information on the employer disaster relief fund exemption. Responding to requests from the Council on…

This chart outlines all provisions that affect the operations of supporting organizations.

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,…

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…

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…

Historical background of non-component and donor-directed funds.