The recently passed Pension Protection Act of 2006 (H.R. 4) introduced new requirements for grants from Donor Advised Funds.
Donor advisors may not receive more than “incidental benefits” from a grant.Penalties for violation of this provision extend to the advisor. We ask that you either:
Include in any e-mail, letter, or faxed recommendation the following language: I/we certify that neither the advisor(s) nor any donor to this fund, or their family members, or any entity that is 35% controlled by them will receive any benefits from this (these) grant(s) that are more than incidental (including the payment of any legally binding pledge).
Agree with this statement if you telephone in any recommendations.
Grants to certain Type III Supporting Organizations are not permitted. Some nonprofits obtain tax exempt status by agreeing to support other exempt organizations; grants from donor advised funds can be made only to some of these. Because these organizations are required to confirm their status to us, the approval process is greatly extended. We will notify any advisor of this delay, and discuss the possibility of making a grant directly to the organization supported.
Grants to or for the benefit of individuals are not permitted. These include reimbursements for expenses as well as scholarships payable directly to educational institutions.
Please contact us with any questions you might have.
