What the New Charities Law Means For You
On Aug. 17, 2006, President Bush signed into law a bill that will impact grantmakers and donors.
The new charitable provisions, part of the Pension Protection Act of 2006 (H.R. 4), include the
first comprehensive regulation of donor-advised funds, as well as reforms or incentives that will
affect private foundations, supporting organizations and individual donors.
If You're A Private Foundation
If you make grants to a Type III supporting organization
You can no longer count these grants toward your payout requirement, and you
must exercise expenditure responsibility for the grants unless the Type III
supporting organization is "functionally integrated."
If you make grants to any type of supporting organization
You must exercise expenditure responsibility for these grants if a disqualified person of your foundation controls the supporting organization or one of its supported organizations, and you cannot count such grants toward your payout requirement.
This information was made possible by the Forum of Regional Associations of
Grantmakers and its members, with valuable technical assistance provided by
Andras Kosaras, Council on Foundations.
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