Grants to Individuals

Department of the Treasury
Internal Revenue Service
IRS
Tax Exempt and Government Entitles
P.O. Box 2508
Cincinnati. OH 45201
Release Number: 202305019
Release Date: 2/3/2023
LEGEND
B = Location of Grant Recipients c dollars= GrantJor Established Teachers d dollars= Grant for Newer Teachers e= Grants Given per Year f= Number of Workshops Dear
Date:
11/09/2022
Taxpayer ID number:
Penion to contact:
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 foundation. 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, 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 submitte4, and assuming you will conduct your program as propose4, we detennined that your procedures for awarding educational grants meet the requirements ofl.RC Section 4945(g)(3). As a result, expenditures you make under these procedures won 1t be taxable.
Description of your request
Your letter indicates you will operate a fellowship program for math and science teachers in B public schools.
Your program provides a c stipend each year for four years to established teachers or d stipend for teachers m the beginning of their career. The purpose of your program is to better retain teachers and expand their knowledge. Funds are used by the recipients to provide and participate in workshops, seminars and classes.
The applicant will be any teacher in B for grades K-12. The program will be publicized on your website, by printed and online ads, and radio announcements. You expect to provide e fellowships per year.
The recipients will be selected by·a committee comprised of your staff members and experts in teaching. TI1e committee will base their decision after an application and interview process. TI1ey will rank the applicants on their knowledge within their fiel4, their knowledge of teacbing, and their ability to understand students.
Letter 4792 (Rev. 1-2022)
Catalog Number 58263T
The fellows are required to be active in the community and attend at least f workshops per year. You will maintain a database documen:ing the number of workshops each fellow attends along with surveys prepared by the fellows showing their current status and the work they conduct at 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 :he 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 future diversions will not occur and that grantees will 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,
• Identify a grantee is a dis~ualified 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 foundations. A taxable expenditure is any amount a private foundation pays as a grant to an individual for travel, study or other similar purp03es.
However, a grant that meets all the following requirements oflRC Section-4945(g) is not a taxable expendi:ure.
• 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 117(a) and is to be used for study at an educational organization described in IRC Section 170(b)(l)(A)(ii); or
- A prize or award subject to the provisions oflRC Section 74(b), if the recipient of the prize or award :s selected from the general public; or
- To achieve a specific ol:jective; 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 gra..,t procedures, Treasury Regulation Section 53.4945-4(c)(l) requi:-es that a private foundation show:
• The grant procedure includes an objective and nondiscriminatory selection process.
• 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. ·
Other conditions that apply to this determination
• This determination 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.
Letter 4792 (Rev. 1-2022)
Catalog Number 58263T
•The effective date of our approval is , which is the date your request was submitted.
• This determination 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 Determinations
TE/GE Stop 31A Team 105
P.O. Box 12192
Covington, KY 41012-0192
• 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 170( c )(2)(B).
• You should keep adequate records anci 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 oflntention 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 dcn'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 Agr~ements
Letter 4792 (Rev. 1-2022)
Catalog Number 58263T