May a foundation make a grant to an individual for travel, study or similar purpose?
A public charity, as opposed to a donor-advised fund, may make a grant to an individual provided the public charity enters into a grant restriction agreement pursuant to which the recipient agrees to use the funds in furtherance of the public charity’s exempt purposes. In contrast, a private foundation is prohibited from making a grant to an individual for travel, study or similar purposes, unless the grant satisfies numerous criteria, including that the grant is made pursuant to a procedure approved in advance by the IRS and is used to undertake activities that are consistent with the private foundation’s exempt purpose. A grant to an individual for purposes other than travel, study or similar purposes is not a taxable expenditure but must otherwise qualify as a charitable grant (e.g., a grant to an indigent individual to meet basic needs). A private foundation also must follow specific record retention requirements for grants to individuals. These requirements do not apply to other t
