Q&A Archive

Do you have advice on setting a foundation spending policy?

There are many ways to determine the endowment spending rate for a nonprofit. Most nonprofits are familiar with less complex approaches that include spending income, assigning a prespecified percentage of the beginning market value, simply deciding on a spending rate, and using the Internal Revenue Service minimum required payout of 5% for certain private foundations.... Read More

We are interested in supporting a local church, but it is unable to document its tax-exempt status. What do you recommend?

Congress has enacted special tax laws that apply to places of worship, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment. According to the IRS, churches and other places of worship that meet the requirements of IRC Section 501(c)(3) are automatically considered tax... Read More

Can we recoup grant funds from a grantee?

It is difficult to recoup grant funds if your foundation did not have a signed grant agreement in place for the grant, with language that lays out what would happen if the grant is misused or not used according to plan.  Even when funders have a signed grant agreement, it can be difficult to recoup... Read More

May our foundation give grants to supporting organizations?

Supporting organizations are 501(c)(3) public charities with a subclassification of 509(a)(3), whose legal structure is formed with a certain relationship with one or more other public charities, the “supported” organization(s). Supporting organizations might be university or hospital foundations; foundations created to support libraries, elementary schools, or other governmental units; or trusts created by individuals to benefit... Read More