Grants to Individuals

Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entitles
IRS P.O. Box 2508
Cincinnati, OH 45201
Number: 202244025
Release Date: 11/4/2022
LEGEND
B = Stmcture
Dear
Date: 08/10/2022
Taxpayer ID number:
Person to cc,ntact:
Name:
ID number:
Telephone:
UIL: 4945.04-04
You asked for advance approval of your educational grant procedures under Internal Revenue Code (IRC) Section 4945(g)(3).
This approval is required because IRC Section 4945 provides for the imposition of taxes on each taxable expenditure of a private fowdation. lRC Section 4945(d)(3) provides that the term "taxable expenditure" includes any amount paid or incurred by a private fowdation as a grant to an individual for travel, study, or similar purposes by the individual, unless the grant satisfies the advance approval requirement of IRC Section 4945(g).
Our determination
We approved your procedures for awarding educational grants. Based on the information you submitted, and assuming you will conduct your program as proposed, we determined that your procedures for awarding educational grants meet the requirements of IRC Section 4945(g)(3). As a result, expenditures you make under these procedures won't be taxable.
Description of your request
Your letter indicates you will operate a grant-making program to promote research about B with the ultimate goal of demonstrating its collective, cooperative, or behaviors.
You previously made grants directly to universities in order to fund projects or research to investigate the properties of and devices to aid in the study of B, but you will now also provide gran.ts directly to researchers.
The availability of your grants is publicized through the networking of individuals who have previously received grants and through your efforts at directly contacting potential recipients.
Potential recipients are identified through your research of published scientific literature, information available on the internet, email correspondence, telephone correspondence, and personal meetings with individuals.
Grants are awarded to individuals who can contribute to the understanding of B, espt."Cially to its behaviors. You make your final selections based on the individual's expertise in related scientific
Lf~tter 4792 (Rev. 1-2022)
Catalog Nfflnbef 58263T

fields as demonstrated by peer-reviewed publications and access to laboratory facilities required to carry out experiments and whose interests align with yours.
You supervise the grants by reviewing the progress reports, personal correspondence, and meetings. If the tenns of the award arc violated, the grant will be terminated.
Your President is solely responsible for selecting recipients; however, they also rcceiv;! input from your co-Vice Presidents. Relatives of the members of selection committee, or of your officers, directors, or substantial contributors arc not eligible for the awards.
You represent that you will complete the following:
• Arrange to receive and review grantee reports annually and upon completion of the purpose for which the grant was awarded,
• Investigate diversion of funds from their intended purposes,
• Take all reasonable and appropriate steps to recover the diverted funds and ensme other grant funds held by a grantee are used for their intended purposes, and
• Withhold further payments to grantees until you obtain grantees' assurances that futur,:: diversions will not occur and that grantees \vill take extraordinary precautions to prevent future diversion from occurring.
You also represent that you will:
• Maintain all records relating to individual grants including information obtained to evaluate grantees,
• Identity a grantee is a disqualified person,
• Establish the amount and purpose of each grant, and
• Establish that you undertook the supervision and investigation of grants described above.
Basis for our determination
IRC Section 4945 imposes excise taxes on the taxable expenditures of private foundati:ons. A taxable expenditure is any amount a private foundation pays as a grant to an individual for travel, study or other similar purposes.
However, a grant that meets all the following requirements of IRC Section 4945(g) is not a taxable expenditure.
• The foundation awards the grants on an objective and nondiscriminatory basis.
• The IRS approves in advance the procedure for awarding the grant.
• The grant is:
- A scholarship or fellowship subject to IRC Section 1 I 7(a) and is to be used for s.tudy at an educational organization described in IRC Section l 70(b)( I )(A)(ii); or
- A prize or award subject to the provisions of IRC Section 74(b ), if the recipient of the prize or award is selected from the general public; or
- To achieve a specific objective; produce a report or similar product; or improve or enhance a literary, artistic, musical, scientific, teaching, or other similar skill or talent of the recipient.
To receive approval of its educational grant procedures, Treasury Regulation Section 53.4945-4(c)(I) requires that a private foundation show:
• The grant procedure includes an objective and nondiscriminatory selection proccs~ ..
• The grant procedure results in the recipients performing the activities the grants were intended to finance.
• The foundation plans to obtain reports to determine whether the recipients have performed the activities that the grants were intended to finance.
LEitter 4792 (Rev. 1-2022)
C2talog Number 58263T
Other conditions that apply to this determination
• This detennination only covers the grant program described above. This approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request.
• This detem1ination applies only to you. It may not be cited as a precedent.
• You cannot rely on the conclusions in this letter if the facts you provided have changed substantially.
You must report any significant changes to your program to the IRS at:
Internal Revenue Service
Exempt Organizations Detenninations
• You can't award grants to your creators. officers. directors. trustees. foundation managers, or members of selection committees or their relatives.
• All funds dist1ibuted to individuals must be made on a charitable basis and further the purposes of your organization. You cannot award grants for a purpose that is inconsistent with IRC Section I 70(c)(2)(B).
• You should keep adequate records and case histories so that you can substantiate your grant distributions with the IRS if necessary.
We'll make this determination letter available for public inspection after deleting personally identifiable information, as required by IRC Section 6110. We've enclosed Letter 437, Notice of lntcrtion to Disclose -Rulings. and a copy of the letter that shows our proposed deletions.
• If you disagree with our proposed deletions. follow the instructions in the Letter 43 7 on how to notify us.
• If you agree with our deletions, you don't need to take any further action.
Please keep a copy of this letter in your records.
If you have questions, you can contact the person shown at the top of this letter.
Enclosures:
Letter 437
Sincerely,
Stephen A. Martin ·
Director, Exempt Organizations
Rulings and Agreements
LEitter 4792 (Rev. 1-2022)
C2talog Number 58263T