1.Foundations
- What’s taxable, what isn’t
Nonprofits must always
be aware of Internal Revenue Service (IRS) regulations, and Section
4945(d) of the tax code identifies several categories of taxable
expenditures by foundations.
Douglas Mancino has
outlined several of these in the book Foundation Management ,
identifying several categories of taxable and nontaxable expenditure.
Among the taxable expenditures are:
-
Lobbying. This
means any amounts paid or incurred by a private foundation to
carry on propaganda or otherwise attempt to influence legislation.
The regulations under Section 4945 incorporate the definitions
of “attempts
to influence legislation” contained in Section 4911.
-
Electioneering
and voter-registration activities. A private foundation is considered
to be influencing the outcome of a specific public election if
it participates in or intervenes, directly or indirectly, in any
political campaign on behalf of or in opposition to any candidate
for public office.
Among the expenditures
that are not taxable:
-
Grants to public
charities. In general, the primary responsibility of the private
foundation in connection with its proposed grants to public charities
is to establish that the organization is in fact a qualified public
charity.
-
Grants to other
private foundations. Such grants are not taxable expenditures,
provided they exercise expenditure responsibility for the grants.
-
Grants to non-charitable
organizations. This is permissible, as long as the grant is intended
to further a charitable, educational, scientific or other exempt
purpose.
-
Grants to individuals.
These are allowed if they are meant to accomplish charitable, educational
or scientific purposes, but additional steps must be taken if the
money will be sued for travel, study or similar purposes.
 2.
EuroPartnerships
Foundations have
engaged in a range of leadership and partnership activities with
charities, businesses and public authorities at the local, national,
European and global levels.
According to information
from the European Foundation Centre, such partnerships can represent
a very attractive option for the following four principal reasons:
-
Foundations give
a human dimension to public actions -- in other words, they focus
on the rule of law and civil society, respect for minority rights,
freedom of the media, tolerance and pluralism and can reach parts
of society that government cannot reach.
-
They have the
ability to work in a long-term perspective, unlike government officials,
for-profit companies and fundraising associations facing shorter-term
considerations and needs. Thus foundations are able to experiment
and take risks. In doing so, they are in a position to provide
flexible social venture capital for citizens supporting and acting
through charities and other forms of nonprofit entities to develop
useful models for long-term public action.
-
They can enter
into joint funding partnerships wherein every euro of funding goes
to the recipient. Foundations are unique in their financial independence
that is in stark contrast with other nonprofit bodies that do not
have their own resources to cover their administrative costs.
-
They can complement
public authorities and the private sector or add resources where
the latter are unable to operate because of legal or other restrictions.
|
