Legal Information

This resource is a Council Summary of IRS Interim Guidance found in IRS Notice 2006-109, issued December 6, 2006, and explains steps for determining supporting organization status, and important information on the employer disaster relief fund exemption.

Responding to requests from the Council on Foundations and Independent Sector, the Internal Revenue Service on December 4, 2006 issued interim guidance on several of the donor-advised fund and supporting organization issues arising from the Pension Protection Act of 2006. The notice is available at http://www.irs.gov/pub/irs-drop/n-06-109.pdf .

Determining Supporting Organization Status of Grantees
IRS guidance for private foundations and sponsoring organizations of donor-advised funds on how to:

• Determine whether a public charity is a supporting organization,
• Determine which type it is, and
• Determine whether a Type III supporting organization is "functionally integrated."

"Control Test" for Private Foundations
Provides guidance on the control test to be applied in determining whether a private foundation disqualified person or a donor/advisor controls an organization that the supporting organization supports.

Employer Disaster Relief Funds are not Donor-Advised
Certain employer-connected disaster relief (but not emergency hardship) funds are exempt from the definition of donor-advised fund.

Supporting Organization Employment Contracts
Transition relief was provided for supporting organizations with preexisting contractual and employment relationships with the supporting organization’s substantial contributor or persons related to the contributor.

Scholarship Relief
Transition relief was provided for scholarships awarded prior to August 17, 2006.