Good News from the IRS for Public Charities that Give Grants

Issues: Free Speech Rights of Nonprofits

A new ruling from the Internal Revenue Service indicates that they will allow public foundations or other public charities that have made the 501(h) election to rely on the rules that already govern grantmaking by private foundations.  This is good news for community foundations and all other public charities (what most people think of as "nonprofits") that make grants.

While private foundations have had the benefit of clear IRS guidance on how they can support public charities that lobby, foundations, such as community foundations and women's funds, along with other public charities that make grants or "re-grant" have not had that clarity.  Alliance for Justice requested a ruling from the IRS in 2005 in an effort to resolve the uncertainty for public charities. 

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