Paying compensation or reimbursing expenses by a private foundation to a disqualified person is generally an act of self-dealing. The general rule does not apply, however, to the extent the payments, which cannot be excessive, are for personal services that are reasonable and necessary to carry out the foundation’s exempt purposes.  Thus, it is not an act of self-dealing for a private foundation to pay reasonable compensation to a foundation manager, who is an investment advisor, for managing the private foundation’s investment portfolio.  Also, paying reasonable compensation to trustees of a trust would not constitute self-dealing, because their services are necessary.  See Exceptions to Self-Dealing.

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