A foundation grant to an organization that is not a private foundation (except certain organizations organized and operated exclusively for testing for public safety) is not a taxable expenditure if the grant is not earmarked to be used for, or in a manner outlined in, items (1) through (5) under Taxable Expenditures. In addition, a grantor foundation may not enter into an oral or written agreement with a grantee that causes the grantee to engage in any prohibited activity nor may the grantor select the recipient of the grant. A grant is earmarked if it is given under an agreement, oral or written, that the grant be used for specific purposes.] Return to Life Cycle of a Private Foundation
