Self-Dealing by Private Foundations: Providing Goods, Services or Facilities


Generally, providing goods, services or facilities between a private foundation and a disqualified person is an act of self-dealing.  This applies to providing goods, services or facilities--for example, office space, cars, auditoriums, secretarial help, meals, libraries, publications, laboratories or parking lots. However, it is not self-dealing if a disqualified person provides them to a foundation without charge and the goods, services or facilities are used exclusively for purposes specified in section 501(c)(3) of the Code. Also, providing goods, services or facilities to a foundation manager, employee, or unpaid worker, is not an act of self-dealing if the value of the items provided is reasonable and necessary to the performance of the tasks involved in carrying out the exempt purpose of the foundation and is not excessive.

For example, it is not an act of self-dealing if a private foundation provides meals and lodging which are reasonable and necessary (but not excessive) to a foundation manager. This is true whether or not the value of the meals and lodging is excludable from the manager's gross income.

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