Grants to Individuals

Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entitles
IRS P.O. Box 2508
Cincinnati. OH 45201
Number: 202244031
Release Date: 11/4/2022
LEGEND
C '''Nmnher d dollars=, Amowit
Dear :
Date: 08/10/2022
Taxpayer iO number:
Person to cc ►ntact:
Name:
ID number:
Telephone:
UIL: 4945.04-04
You asked for advance approval of your scholarship procedures wider Internal Revenue Code (IRC) Section 4945(g)(l). You requested approval of your scholarship program to fund the educatkm of certain qualifying students.
This approval is required because IRC Section 4945 provides for the imposition of tuxes on each taxable expenditure of a private foWldation. IRC Section 4945(d)(3) provides that the term "taxable expenditure" includes any amount paid or incurred by a private foundation as a grant to an individual for travel, sh1dy, or similar pwposes by the individual, unless the grant satisfies the advance approval requirement of IRC Section 4945(g).
Our determination
We approved your procedures for awarding scholarships. Based on the information you submitted, and assWlling you will conduct your program as proposed, we determined that your proc,edure s for awarding scholarships meet the requirements ofIRC Section 4945(g)(l). As a result, expenditures you :make Wlder these procedures won't be taxable.
Additionally, awards made 1mder these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified tuition and related expenses ( subject to the· linritations provided in IRC Section l l 7(b)).
Description of your request
Your letter indicates you will operate a scholarship program for graduate students pursuing a doctoral degree in a Wliversity, seminary, or bible college. The purpose of your program is to provide s,.::holarships to encourage and facilitate theological study and biblical research at the doctoral level.
The number and amo1mt of grants will be determined by availability of your funds and number of qualified applicants. You expect to award in the range of C scholarship grants annually and the scholarship aniouut will be ranging from d dollars to each recipient The amo1mt for each recipient will depend 011 the cost of a particular program of study, resources the recipient already has, and the amount of funds avaifable. You may not offer new scholarships eacb year if grant renewal bappens.
LE~er 4792 (Rev.1-2022)
Cll4alog Number 58263T
Your scholarship program will be publicized on your website and in your newsletters.
To be eligible for a scholarship, the student must:
• Have distinguished themselves academically at the undergraduate level
•Bea college graduate pursuing a doctoral degree in theology or related field at a unih:rsity, seminary, or bible college
• Have served extensively in an area of ministry, paid or volunteer
• Give evidence of a sense of calling to vocational ministry either in the academic fidd, a parachurch ministry, or in and through the church
• Research and write their dissertation on an approved topic that informs, advances, and directly contributes to your work Recipients can qualify for renewal if the recipients make steady and consistent acad(:mic progress, maintain a grade point average of at least 3.0 on a 4.0 scale, connect and serve in local church (paid or volunteer), and maintain communication with you through quarterly reports and updates.
Your Executive Director will oversee the scholarship program and the funds will be paid to the educational institutions where possible. Scholarships given to students through the academic instituticn will be distributed only as the student remains enrolled and in good standing with the institution. Recip,cnts will be required to supply progress and grade reports at the end of each academic session. Failure to meet the conditions of each scholarship will result in a probationary period of one academic session where the recipient ,viii have opportunity to meet clearly communicated expectations. followed by tennination of the scholarship if conditions remain unmet.
Your selection committee consists of of your board members and one independent committee member.
Criteria for their selection is nomination and election by the larger board of trustees. Relmives of members of the selection committee, or of your officers, directors, or substantial contributors, will not be eligible for awards made under your program.
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 ensure 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 will take extraordinary precautions to prevent future divers.ion from occurring.
You also represent that you will:
• Maintain all records relating to individual grants including infom1ation obtained to evaluate grantees,
• Identify 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 foundat:·ons. A. taxable expenditure is any amount a private foundation pays as a grant to an individual for travel, study or oth-:r similar purposes.
However, a grant that meets all the following requirements of IRC Section 4945(g) i:~ not a taxable expenditure.
LEitter 4792 (Rev. 1-2022)
C2talog Number 58263T
• The foundation awards the grant 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 the provisions of [RC Section 117(2).
• The grant is to be used for study at an educational organization described in IRC Section 170(b)( I )(A)(ii).
Other conditions that apply to this detem1ination
• This determination only covers the grant program described above. This approval wit I apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request.
• This dete1mination 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 Dete1minations
• You can't award grants to your creators, officers, directors, trustees, foundation managers, or members of selection committees or their relatives.
• All funds distributed 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 l 70(c)(2)(8).
• 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 dete1mination letter available for public inspection after deleting personally identifiable information, as required by IRC Section 61 l 0. We've enclosed Letter 437, Notice of Intention 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 437 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)
Catalog Number 58263T