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Exceptions - Self-Dealing by Private Foundations: Providing goods, services, or facilities by a private foundation to a disqualified person

Providing goods, services, or facilities by a private foundation to a disqualified person is not self-dealing if the goods, services, or facilities are made available to the general public on at least as favorable a basis as they are made available to the disqualified person and the goods, services, or facilities are functionally related to the exercise or performance by a private foundation of its exempt purpose.

The term general public includes those persons who reasonably would be expected to use the foundation's goods, services, or facilities.  This does not apply, however, unless a substantial number of persons other than disqualified persons actually use the goods, services, or facilities.

A private foundation that provides recreational or park facilities to the general public may provide those facilities to a disqualified person if they are provided to that person on a basis no more favorable than that on which they are provided to the general public.  Similarly, the sale of a book or magazine to disqualified persons is not an act of self-dealing if publishing the book or magazine is functionally related to a charitable or educational activity of the foundation.  The publication must be made available to disqualified persons and the general public at the same price.  Moreover, if the terms of the book or magazine sale require, for example, payment within 60 days of delivery, and payment is made during the 60–day period, the transaction will not be treated as a loan or extension of credit if these terms are consistent with normal commercial practices.


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Page Last Reviewed or Updated: 16-Sep-2016