The PTSSD may make grants to organizations where such grants fulfill the PTSSD’s tax-exempt charitable or educational purposes.
Tax-exempt, charitable purpose is described here in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; lessening neighborhood tensions; eliminating prejudice and discrimination; and combating community deterioration and juvenile delinquency.
Because of the requirement to make grants only for tax-exempt purposes, the IRS regulations stipulate that a private foundation (like the PTSSD) cannot make a grant to
a non-501(c)(3) organization unless:
- the making of the grant constitutes a direct charitable act (meaning the grantee uses
the funds directly to conduct a charitable function and does not re-grant the funds to non-charitable purposes); or
- the grantor is reasonably assured that the grant will be used exclusively for 501(c)(3) tax-exempt purposes.
The IRS regulations state that the grantor can obtain this assurance if the grantor:
- exercises expenditure responsibility (meaning that the grantee submits reports and receipts relating to the grant).
- requires a non-501(c)(3) grantee to maintain the grant funds in a separate account.