Legal stuff. See also the Events Legal page.
Fundraising
Q: What are the fundraising limits for a private family foundation?
A: You don’t have many limits. The real issue you have to worry about as a family foundation is self-dealing. You are welcome to accept money from anyone, however, if that person/organization donates $5,000 or more to you they become a “Disqualified Person” in the eyes of the law. This means that they are disqualified from working directly with the foundation. Ex: ABC Sign Company donates $5K to Stimpunks. For the remainder of the year, Stimpunks cannot hire ABC Sign Company to create signage for events because ABC Sign Company is a “Disqualified Person” due to their donation size. If Stimpunks hires anyone that gives you $5K or more for any project, you are self-dealing and the IRS will audit you.
Q: Is there a limit to the amount we can raise each year?
A: No, there’s no limit to the amount of non-federal funding you can raise. You have limits around federal funding, but you don’t provide services the federal government would fund at this time. So, you don’t need to worry about that.
Q: What percentage of raised funds do we have to be sure to spend each year?
A: The law says private foundations must spend 5% of their net investment assets per year. There is no percentage rule around raised funds specifically, just the overall net investment assets. If you don’t spend 5% or more on grants or internal qualifying expenses, the IRS will tax you.
Q: Are we allowed to donate family funds to an organization or cause with family funds and credit Stimpunks. Is that allowed?
A: I’d stay away from crediting Stimpunks with anything that the entity didn’t pay for directly. You can make a donation to Stimpunks from the family fund and then use that money to donate to wherever you want. You just gotta pass it through Stimpunks first.
Online Store
Q: Can we do something like this in our online store?
https://www.humanrestorationproject.org/resources
They have resources/courses etc and have it setup where people can donate the amount that they choose to access the resources. Can we do something like this on our website?
A: Sure, that’s totally legal.
Data Retention
Q: How long do we have to retain records and what do we have to retain?
A: You really only need to keep information for 3 years b/c that’s how far back the IRS requires you to keep anything. You have to keep records of all money going in and out, grantees’ names, and contact info. You are not required to keep or store IP addresses.
Q: Applicants share some very personal information with us to explain their need for a grant. Do we need to keep any of that around long term? How soon can/should we delete that information?
A: You do not need to keep any personal information for any amount of time. Personal information should be deleted as soon as possible.
