Private Foundation Rules

A Section 501(c)(3) exempt organization is presumed to be a private foundation unless it qualifies as a public charity. The distinction between the private foundation and public charity classification may be critical for organizational leaders to understand, as public charity status is generally far more advantageous when there is a choice. Since private foundations are […]

Private Foundation: New Rules Recognizing Mission-Related Investments

On September 15, 2015, the IRS released Notice 2015-62, Investments Made for Charitable Purposes, which may provide comfort to private foundations about making mission-related investments with reasonable business care without violating the jeopardizing investments laws. It is hoped that this guidance will catalyze greater impact investing by foundations using their endowment assets. Mission-Related Investments While a mission-related investment […]

Private Benefit in Tandem Structures

Thanks to our friends at Perlman+Perlman for providing us with permission to re-publish this important post on private benefit issues raised by nonprofit/for-profit tandem structures by one of its partners, Allen Bromberger, whose bio we include at the end of the post. One of the basic principles of tax-exempt law is that charitable and educational […]

F. D’Up Family Foundation

Inspired by recent news stories Fred D’Up inherited a sizable amount of money, which he used to grow a business empire filled with plenty of successes and failures (including multiple business bankruptcies). Regardless of whether his businesses were doing well or not, Fred felt compelled to develop his image as a rich, powerful celebrity, and he was very […]

Private Foundations & Self-Dealing  

We recently added a post to the blog about private foundations and the rules that they are subject to.  Of the private foundation rules, those regarding self-dealing are some of the most complex and have some of the most serious potential ramifications for a private foundation if violated.  In this post, we’ll take a closer […]

Rules Affecting Donor Advised Funds

As stated in our earlier post What Is A Donor Advised Fund?, donor advised funds (DAFs) are subject to several private foundation-like rules that sponsoring organizations may not ordinarily be subject to as public charities. These rules are meant to curb abuses and create more transparency within the DAF community. Prohibited actions include providing personal […]

Pearson Charitable Foundation to Dissolve

A few weeks ago, the Board of Directors of Pearson Charitable Foundation, the Section 501(c)(3) organization affiliated with the educational publishing company Pearson PLC, announced that it will be closing the Foundation at the end of the year after a decade of operations.  According to the Foundation’s website, the decision to close the Foundation comes […]

2013 Annual Private Foundation National Conference – Day Two

    Highlights from the morning sessions of Day Two of the 2013 Private Foundation National Conference in Seattle below. BREAKING NEWS: Greg Colvin's Committee housed within Public Citizen drafted a proposal on clarifying IRS rules on political intervention. See Bright Lines Project (just published yesterday). Direct Charitable Activities – Jody Blazek and Jane Searing A […]

2013 Annual Private Foundation National Conference – Day One

  I'm in beautiful Seattle for the Fourth Annual Private Foundation National Conference. Day One highlights below: Primer on private foundations - Jody Blazek Motivation for starting a private foundation must be charitable Special rules and excise taxes apply to private foundations (n/a to public charities) Self-dealing penalties cannot be abated The statute of limitations on […]

Private Benefit Rules – Part II: Private Inurement Doctrine

The private inurement doctrine is another private benefit rule applicable to public charities. The doctrine comes directly from the language of section 501 of the Internal Revenue Code that only organizations “no part of the net earnings of which inures to the benefit of any private shareholder or individual” may be exempt under section 501(c)(3). A […]