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.

Displaying 65 - 80 of 166 results

Membership Dues and Self-Dealing

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 (…

Mandatory Electronic Filing for Form 990 and 990-PF

Legal Compliance Guidance
Question: Are corporate foundations required to file electronically the 2006 Form 990 or Form 990-PF? Answer: Whether or not a corporate foundation is required to file electronically depends on a number of factors. Generally, only foundations with a substantial number of employees or consultants…

Sharing Office Space

Legal Compliance Guidance
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…

How to Avoid Commingling

Legal Compliance Guidance
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…

Honoring Grant Commitments amid Difficult Corporate Finances

Legal Compliance Guidance
Question: In light of current economic conditions, the corporation has asked whether the company's private foundation may honor grant commitments already made by the corporate giving program. Can the private foundation make these grants? Answer: Maybe. The facts and circumstances surrounding the…

Corporate Foundation Grants to Government

Legal Compliance Guidance
Question: May corporate grantmakers make grants to units of government such as public schools or local parks departments? Answer: Yes, both corporate giving programs and corporate foundations may make grants to units of government as long as the grants are restricted to charitable purposes. What…

Corporate Foundations and Grants to Non-Charities

Legal Compliance Guidance
Question: May our corporate foundation or corporate giving program provide a grant to an organization that is not a charity? Answer: Yes, but the process required to make a grant to a non-charity depends on the type of corporate giving vehicle used to make the grant. Private foundations must take…

Grantmaking Options for Corporate Philanthropies

Legal Compliance Guidance
Question: We are trying to decide how to structure our grants programs between our direct-giving program and our corporate foundation. Are there any general guidelines to help us? Answer: Many factors influence how to allocate grantmaking programs between a corporate giving program and a company…

Funding a Dissolving Nonprofit

Legal Compliance Guidance
Question: Our foundation has been funding a local nonprofit for the last ten years. The nonprofit has one full-time employee and an annual operating budget of about $300,000. The nonprofit recently requested a $50,000 grant for operating expenditures or it will have to close down immediately. Even…

FAQ: Fiscal Sponsors

Legal Compliance Guidance, Fundamentals
We just received a grant request from a group that is not a public charity. The request states that the group has a “fiscal sponsor” and the grant agreement is countersigned by the fiscal sponsor? Can we make this grant? Yes. A grant to a public charity serving as a fiscal sponsor is treated like…

Establishing a Scholarship Fund for Corporate Employees

Fundamentals, Legal Compliance Guidance
Question: Our corporate foundation is planning to establish a scholarship fund for our employees' children. What do we need to keep in mind and what steps do we need to follow to ensure we are complying with the legal requirements? Response: The granting of scholarships, fellowships, and…

Discretionary Grants by Corporate Foundations

Legal Compliance Guidance
Question:May a corporate foundation allow corporate board members who do not sit on the foundation’s board to designate grants from the corporate foundation? Answer:No. All grants from the corporate foundation must be approved by the corporate foundation’s board of directors. No individual—…

Corporate Disclosure and the Sarbanes-Oxley Act of 2002

Legal Compliance Guidance
What is the Sarbanes-Oxley Act? The Sarbanes-Oxley Act of 2002 was designed to rebuild public trust in the corporate community in the wake of the Enron scandal and other corporate and accounting scandals. Sarbanes-Oxley requires publicly traded companies to adhere to governance standards that…

Accounting for Agency Endowment Funds Held at Community Foundations

Legal Compliance Guidance
Introduction Nonprofits place their endowment funds with community foundations for a variety of reasons, including investment expertise, efficiencies, and access to planned giving advice and services. As nonprofit organizations seek to place their assets and partner with the foundation, questions…

How a Private Foundation Can Use "Friends of" Organizations

Legal Compliance Guidance
U.S. private foundations are increasingly involved in international grantmaking. One way for a private foundation to give overseas is to make grants directly to foreign charities. Many U.S. private foundations, however, may want to consider giving overseas indirectly through a "Friends of"…

Changing Supporting Organization Status

Legal Compliance Guidance
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)(1) or…

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