Grants to governmental agencies
If a private foundation makes a grant to a governmental agency, and the grant is earmarked for use by an individual for travel, study, or other similar purposes, the grant is not a taxable expenditure by the private foundation if the governmental agency satisfies the Service in advance that its grant-making program:
- Furthers exempt purposes under section 501(c)(3),
- Requires the individual grantee to submit annual progress reports, and
- Requires the organization to investigate jeopardized grants.