Tax and Legal Archives - Page 6 of 13 - Exponent Philanthropy


Topic: “Tax and Legal”

Year-End Tips for Meeting Your Minimum

It’s December and your foundation wants to fulfill its payout requirement within the calendar year. What can you do? Ask your local community foundation, association of grantmakers, or giving circles for information about community needs and nonprofits they support. Consult with members of the faith community. Ask your government social services agencies, United Way, or... Read More

Understanding the Excise Tax

Although private foundations are exempt from the federal income tax, each private foundation must pay an annual excise tax on its net investment income. Congress imposed this tax in 1969, arguing that the income was necessary to pay for the costs of auditing and monitoring private foundations. The tax is usually 2% of investment income... Read More

Top Ten Year-End Foundation Tax Tips

Avoid the federal excise tax by donating publicly traded appreciated stock to a grantee, an underused yet effective tax-planning vehicle.For example, if a foundation maintains 1,000 shares of Company X with a market value of $200 a share ($200,000), but a cost value of $50 a share ($50,000), the foundation would have to pay an... Read More

Tipping the Scales With a Large Grant

Private foundations must follow more stringent rules than public charities, pay an excise tax on net investment income, and pay out an amount equal to 5% of their assets annually. Public charities that are tipped into private foundation status also may lose funding. Many foundations will not give grants to other private foundations, and individual... Read More

Three Types of Audits

Foundations may undergo three types of audits: independent audits (those elected by your foundation); Internal Revenue Service (IRS) audits; and state-level audits. An independent audit happens when a foundation hires an outside auditor to assess its finances and show that it has internal controls and built-in checks and balances. Independent audits ensure that your foundation’s... Read More