Expenditure responsibility is the federally mandated procedure that a private foundation—and some public charities—must follow for any grant made to an organization that is not a public charity. This chapter of Mastering Foundation Law: The Council on Foundations Compendium of Legal Resources focuses on the steps of expenditure responsibility when granting to non 501(c)(3) organizations.
When a private foundation makes a grant to an organization that is not classified by the IRS as tax-exempt, it is required by law to ensure that the funds are spent for charitable purposes and not for private or political activities. Find FAQs, rules and sample policies to ensure your grants to "non-charities" are for charitable purposes.
In-Depth knowledge on Expenditure Responsibility
Mastering Foundation Law: The Council on Foundations Compendium of Legal Resources is a comprehensive guide to foundation law for the non-lawyer. It is easy to use, self-directed, and regularly updated. Once completed, the Compendium will be comprised of 38 chapters covering all aspects of foundation law, from creating a charitable foundation and grantmaking basics to self-dealing and planned giving.
Expenditure responsibility is a 5-step procedure that is designed to ensure that foundation funds are used for exclusively charitable purposes.
A tool to help private foundations determine when to use expenditure responsibility for grants to public charities.
Use this flowchart to determine if grants from donor advised funds require expenditure responsibility.
The basics of equivalency determination and expenditure responsibility and when to use either option in global grantmaking.