Navigating Legal and Ethical Issues - Tickets to Fundraisers

outstretched hand waits for a free performance ticket

Question: What should corporate foundations and the parent company consider when purchasing tickets to fundraisers?

Response: Whether they are tickets to a dinner, to a performance or simply for general admission to a facility, tickets have an economic value. When a company or foundation purchases tickets, the first issue to consider is which entity is purchasing the tickets-the foundation or parent company? If the parent company purchases the tickets, there is no concern about which individuals use the tickets. For this reason, the easiest way to handle the purchasing of fundraising tickets is to make the purchase through the corporate giving program.

If the corporate foundation purchases the tickets, the foundation must consider who uses the ticket. The basic rule is this: self-dealing rules bar disqualified persons (e.g., executives and board members of the parent company) from receiving tangible economic benefit as a result of foundation grants. Thus, even though it may be for a good cause, the corporation and its managers generally may not use tickets purchased by the foundation or other admissions provided on account of the company foundation grants. However, if a company executive is also a foundation board member, he or she may attend for reasons associated with their foundation work such as monitoring a grantee. Spouses and other family members cannot attend using foundation purchased tickets unless they, too, have legitimate foundation responsibilities.