Grantmaking Presentation at Dallas Nonprofit Study Group

Ripples in a pond.

Grants creating impact.

I am fortunate to work with many private non-operating foundations (both family foundations as well as independent foundations) with varied grantmaking programs. Some of these foundations make grants only to public charities while others have scholarship programs. Some make grants to governmental entities for public projects while others focus their efforts on international aid. What is consistent across all of these organizations, is their need to satisfy their minimum distribution requirement under Section 4942 of the Internal Revenue Code (foundations must generally distribute at least 5% of the aggregate fair market value of their nonexempt use assets on an annual basis in qualifying distributions) and their desire to avoid the making of taxable expenditures.

A couple of days ago I had the opportunity to speak to the Dallas Bar Association’s Nonprofit Study Group on grantmaking activities of private foundations with a specific focus on qualifying distributions (when grants constitute qualifying distributions, when they don’t, and when out of corpus rules must be followed) and taxable expenditures (when grants constitute taxable expenditures, when they don’t, and when special rules such as expenditure responsibility must be followed). We had a good discussion particularly related to what I view as nontraditional grants, such as grants to supporting organizations, grants to non-501(c)(3)s for charitable purposes, etc. A copy of my reference paper can be found here and a copy of the PowerPoint slides can be found here.

The Dallas Bar Association’s Nonprofit Study Group meets at noon on the 3rd Wednesday of every month (with summers off) in the Rain Room at the Belo Mansion in Dallas. If you are a nonprofit professional in the Dallas/Fort Worth area, I encourage you to check it out.


Keeping the Faith: Avoiding Mission Drift in Private Foundations

Puzzle pieces form bridgeMy colleague, Michael Bourland and I closed the Texas Bar CLE Governance of Nonprofit Organizations seminar last Friday discussing planning methods for avoiding mission drift in private foundations while also avoiding founder’s syndrome and control of the dead hand.  It isn’t always easy top stay within those two extremes.  Mike has decades (as he likes to remind me) of experience in speaking on vision and passing on vision within an organization and particularly a family organization.  This talk grew from concepts and ideas I’ve had the great fortune to discuss with him over the years.

Here is a link to the paper and the slides.

Resolving Trustee Disputes

Trustee disputeLast week I spoke on the issue of resolving disputes in the boardroom at the Texas Bar CLE Governance of Nonprofit Organizations Seminar. My talk discussed common issues leading to disputes, responses to disputes, when to seek help from a third party (facilitator, mediator, arbitrator) and when litigation may be called for.  The paper for the presentation also discusses the when and how of splitting a private foundation, terminating a private foundation into a donor advised fund, or simply terminating a private foundation. The paper was primarily written by my colleague at Bourland, Wall & Wenzel, Megan Cunningham.

Here are links to the paper and slides.