Resources You Can Use
Legal Question of the Month with Staff Counsell Remy Barnwell
Question: We have a 501(c)(7) sportsmen's club that is selling land to a forest conservancy. We have been asked to manage a portion of the proceeds as an endowment. I would like to know what the IRS's outlook would be on this arrangement. Obviously, we would need to make sure that no money that we distribute would be used to benefit individual members or to be used for any lobbying activities in which they might engage.
Answer: There’s no legal reason you couldn’t hold an endowment to benefit a 501(c)(7), or any other non-charity for that matter, but you’re correct that you’d need to take additional steps to ensure that all distributions from the endowment would further exclusively charitable activities carried out by the organization rather than supporting its general operations. This documentation could involve requiring the organization to submit funding proposals each time they request a distribution that would outline how they intend to use the funds to further specific charitable projects or activities, and then requiring follow up reporting detailing how funds were expended. And of course, you’d also need to stipulate that funds can’t be used to benefit members’ private interests or engage in lobbying and political activities, as you’ve noted.
Council members are encouraged to send any legal inquiries to legal@cof.org.
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CF Insights Highlight
Determine How Peers are Sustaining Their Operations Through CF Insights
Outside of admin fees, what operating revenue sources are helping to sustain community foundation operations? What percentage of community foundation budgets are being covered by operating endowments, and how much should a community foundation of a certain size depend on direct gifts to support operations? With CF Insights, dig into the operating revenue mix of your peers and uncover how different revenue models support the work they do.
If you want to learn more visit cof.org/cfinsights, or email cfinsights@cof.org to request a live 1-on-1 demo.
NEW: Values-Aligned Philanthropy: Responsible Giving
Foundation leaders committed to values-aligned philanthropy policies, which ensure grantmaking efforts do not fund hate and extremism, know that all stakeholders need to understand both the policies and the reasons for their creation.
Download our new publication, Values-Aligned Philanthropy: Discussing Responsible Giving With Donors, to learn insights, tips, and advice from the field to aid your own efforts in navigating values-aligned philanthropy with donors and addressing their concerns.
2025 Community Foundation Cohort (ABFE/CFLeads)
ABFE and CFLeads are offering a free new cohort program in 2025 for community foundations to collaboratively engage with the Sustainable Development Goals (SDGs) and advance their racial equity agendas. Combining expertise and peer learning within participating organizations, the 2025 SDG Cohort will help institutions mobilize stakeholders, advance their missions, and increase impact and accountability.
The deadline to apply is tomorrow, December 20 at midnight E.T.!
Building partnerships with our Latine communities
Connecting Communities in the Americas, a CFLeads initiative, and Hispanics in Philanthropy partnered to create a guide for community foundations to build meaningful partnerships with Latine communities.
Download this publication to learn from the experiences of 19 Latine professionals working with or within community foundations, including how to engage Latine communities effectively.
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