The “Big Bet” Social Change Movement

One of the most hopeful developments in the past few years has been the philanthropy community’s increasing openness to reexamining the roles of donors as well as organizations and to addressing entrenched problems in society including wealth inequality and social justice. The Stanford Social Innovation Review (SSIR) is a treasure of thought leadership for social change. In its Winter 2016 issue, the editors Read More

Private Foundation Lobbying: Ninth Circuit Bunts

In December 2017, the Ninth Circuit Court of Appeals issued a decision in a much-anticipated case involving the conservative-leaning Parks Foundation of Oregon and its controlling director, Loren Parks. At issue was whether the IRS had correctly imposed a hefty excise tax under Internal Revenue Code (IRC) section 4945 for alleged lobbying that is prohibited as a “taxable expenditure.”  This penalty tax was Read More

Qualifying Distributions: What About Admin Expenses?

From time to time, the U.S. Congress undertakes a major overhaul of the federal tax code. One of those years was 1969. Before then, there was inadequate oversight of private foundations. The major changes that Congress authorized that year significantly tightened the regulatory structure that distinguished private foundations from public charities. One of the pre-1969 problems was that many private foundations Read More

Disqualified Person: Why It’s Such a Big Deal

When an organization applies for tax exemption under Internal Revenue Code section 501(c)(3), the IRS assumes it is a private foundation unless the group can demonstrate enough "public support" to be classified as a public charity. This classification matters because a private foundation is subject to greater scrutiny than a public charity and donors to a private foundation receive less generous tax benefits. There Read More

MacArthur Announces $100-Million Contest Winner

Photo Attribution and Source: The MacArthur Foundation,  https://www.macfound.org/programs/100change/2017/ What if $100-million suddenly fell out of the sky to tackle a “critical problem affecting people, a place, or the entire planet?” The folks at the International Rescue Committee and the Sesame Workshop (of  “Sesame Street” fame) will now have the chance to find out. Their joint proposal to help traumatized Read More

Grants to Foreign Organizations: New Guidance

Private foundations have different - more stringent -  rules and requirements than 501(c)(3) organizations that are classified as public charities. The reason for this distinction: Foundations don’t solicit or receive donations from a wide swath of the general public, so there are special rules and regulations to ensure proper oversight. This is a particular concern for United States foundations that seek to assist Read More

Grantees Can Now Review Foundations

“Be the first on your block to review a foundation….” writes Ruth McCambridge, editor of The Nonprofit Quarterly. She describes GrantAdvisor.org as the “Yelp” of the foundation world. It’s a “brand-new platform,” in pilot phase, that “promises to be an essential breakthrough tool for foundation fundraising in the United States.”    Reviewing Foundations Anonymously GrantAdvisor.org is the brainchild of three Read More

The "Sunsetting" Foundation: Trend of the Future?

The standard model of nonprofit corporate philanthropy is a nonprofit organization or trust created to last … well … forever. There was a time when families who were establishing private foundations rarely thought about an end to the foundation. They assumed what they had created would last (as intended) in perpetuity from generation to generation. What they discovered, as John D. Rockefeller observed years ago, is Read More

Foundation Penalties: Reasonable Cause Exception?

Because private foundations receive financial support from a single source only or just a few sources, they are subject to much more significant restrictions than public charities. There are rules on how they operate and how they manage and distribute charitable dollars. If they fail to follow these rules, the IRS may impose significant penalties. For instance, “self-dealing” transactions with “disqualified persons” Read More

Exciting Submissions for MacArthur Foundation $100-Million Contest

Early last summer, we reported in “The MacArthur $100-Million Grant Contest,” that the prestigious MacArthur Foundation had launched an audacious competition under the slogan: “Big problems require bold solutions.” According to the terms of the “100&Change” competition announced on June 2, 2016, there is to be a $100-million award for a “single proposal that will make measurable progress toward solving a Read More