Funding a private foundation is one of the most effective ways to build a legacy that can spark positive change. Unlike public charities that rely on constant fundraising, private foundations are typically established and funded by private individuals or a corporation.

This unique structure gives you a wonderful amount of control over how your charitable funds are invested and distributed to causes you care about most. However, this high level of control also comes with a significant amount of legal responsibility and strict regulatory oversight. The MK Law & Consulting team helps private foundations understand their legal obligations so the foundation can focus on accomplishing their charitable purposes.

The Legal Responsibilities for Private Foundations

Private foundations are strictly regulated under both state and federal law. Understanding and complying with these rules is often not intuitive. MK Law provides legal guidance to private foundations to comply with these strict, and often highly complex laws, including:

  • Identifying disqualified persons and activities that could give rise to direct or indirect self-dealing.
  • Structuring transactions to avoid self-dealing and the imposition of excise taxes on the foundation and its managers.
  • Advising foundations on excess business holdings and jeopardizing investments.
  • Calculating the foundation’s mandatory distribution amount and identifying expenditures that are qualified distributions.
  • Assisting foundations in grant making activities to ensure grants are treated as qualified distributions and not as taxable expenditures.
  • Identifying grants that require expenditure responsibility and assisting foundations with complying with the expenditure responsibility requirements.

Common Operational Hurdles for Foundation Leadership

Managing private foundations involves a lot more than awarding grants to charitable causes and making the world a better place. As your organization grows, both in size and in assets, there are operational and administrative issues that the MK Law team can help you with:

  • Board Governance. Developing clear policies helps your board members manage potential conflicts of interest and maintain complete transparency.
  • Contract Management. Reviewing and drafting vendor agreements protects your foundation’s assets whenever you collaborate with outside partners.

Setting up Your Strategy for Long-Term Success

To keep your foundation running smoothly, having a dedicated legal partner can make all the difference. MK Law provides practical, straightforward, cost-effective solutions to address the legal and compliance-related needs of private foundations. We work closely with private foundations and offer comprehensive support to handle your legal needs. Contact the MK Law team today to protect your legacy and your foundation.