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Apr 1, 2006 12:00 PM
Venture Philanthropy Deal Okayed
From David T. Leibell and Daniel L. Daniels, partners of Cummings & Lockwood LLC in Stamford, Conn., we have this update: IRS approves private foundation's venture philanthropy strategy for assisting minority-controlled businesses. The IRS recently issued a ruling that's notable because it highlights a trend known as venture philanthropy, in which private foundations attempt to leverage their value
From David T. Leibell and Daniel L. Daniels, partners of Cummings & Lockwood LLC in Stamford, Conn., we have this update:
IRS approves private foundation's venture philanthropy strategy for assisting minority-controlled businesses. The IRS recently issued a ruling that's notable because it highlights a trend known as “venture philanthropy,” in which private foundations attempt to leverage their value in the community by partnering with private individuals and businesses. In PLR 200610020 (issued March 10), the Service ruled that a private foundation's investment in a venture philanthropy fund (the fund) didn't violate the IRC Section 4944 prohibition against jeopardy investments. The private foundation wanted to establish the fund — along with players and owners of local professional sports teams — to invest in minority-owned businesses in low-income communities. The Service approved the investment because it was a program-related investment carrying out the foundation's charitable purpose. The IRS also ruled that certain expenses incurred by the foundation in establishing and maintaining the investment fund would constitute qualifying distributions under IRC Section 4942.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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