Private foundations are typically closely-controlled organizations that receive funding from only a few sources. Many private foundations focus primarily on grantmaking, although some private foundations, known as private operating foundations, conduct their own charitable activities and programs. Private foundations are highly regulated by Federal and state laws and regulations, which impose excise taxes and other restrictions and requirements on foundation operations, including the management and investment of their funds.
We review the programmatic and investment activities of our private foundation clients to help them operate in full compliance with the private foundation rules. We counsel foundation clients regarding prevention of self-dealing between the organization and its substantial contributors, directors, officers, and other disqualified persons, avoidance of Jeopardy Investments, and compliance with minimum annual payout requirements.
We advise our clients regarding grantmaking issues applicable to private foundations, including selection of permissible charitable grantees and preparation of the required grant agreements, reports, and records necessary to monitor grants. We also provide guidance to existing private foundations that wish to become reclassified as private operating foundations, and in situations in which a foundation determines that it must cease operations, we assist with the termination process and transfer of foundation assets to another appropriate charitable organization.