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Irwin Law
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My client is a wealthy international philanthropist and US

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My client is a wealthy international philanthropist and US citizen. We are setting up a 501c3 for her. I'm looking for general guidance and expertise, not highly specific handholding...though I'm sure that's subjective :-)

She gives money, raises money, does volunteer work and brings resources together for people in need around the world (though mostly in the US). There is no predicting exactly what she will do next, or how much or little money will be involved. She just follows her heart.

__My main concern setting up so she can work effectively *internationally* through her foundation. Currently of course she works through other charitable organizations when she can.

►The first step is the narrative for the IRS, explaining how we will chose projects overseas, because of course they want to keep a watchful eye on money moving out of the US, particularly to trouble spots.

We have no specific answer, she just wants to do a better job with each thing she chooses to get involved in. ►What types of statements should we be making/emphasizing, and what others should we be avoiding in the narrative to the IRS?
she can.

►What else should we be concerned with in order to set the foundation up to work best internationally, and/or receive IRS 5013c approval? For example, at this point we have no idea how to do create the 3-year budget & projections required, since things change month to month with no specific advance planning. Should we try to emphasize how much is done in the US (which is true)? What else?
Submitted: 1 year ago.
Category: Legal
Expert:  Irwin Law replied 1 year ago.

Hello and thanks for sending this interesting question. I think the foundation needs a specific area of interest such as, promoting education, eradicating hunger, fighting disease etc.... Make it as broad as possible within specific areas. What I'm saying is that just "doing good things for people" won't cut it. But areas such as health, education, economic betterment, working with established charities are very broad. She could limit her foundation to extending support to established charities, but that would narrow her options somewhat. She has to assess the importance of raising money from others. Also it would simplify the application somewhat if it were to be designed that way. Her foundation can always direct funds to special projects selected by her, but channeled through an existing 501c3. The three year budget is problematic. If you are a brand new organization you have no way to judge it. The one that I'm working on now is a Church, and we simply had a CPA ballpark it. The thing that they seem to be most concerned about is compensation being paid to officers, directors and family members. Also, related organization ties. I would emphasize the U.S. work, and also submit descriptions of the charitable projects your client has engaged in up until now. My submission went in in March for a church, which should be a no-brainer. I called IRS for a follow up yesterday and was told that they are now working on April 2012 apps.

I hope this information is helpful and that you will enter a positive rating. I thank you for submitting your question to Pearl-Just Answer. We appreciate your business. If you need clarification or additional information, please send me a Reply and I will be happy to explain further. Please consult a local attorney to verify the accuracy of this information according to your state's laws.

Customer: replied 1 year ago.

Awesome, thanks! And apologies for the delay in responding over the weekend.


 


You mentioned "She has to assess the importance of raising money from others. Also it would simplify the application somewhat if it were to be designed that way."



That raises two questions. Could you clarify what you're referencing when you say



"it would simplify the application somewhat if it were to be designed that way." ?



Second, re "She has to assess the importance of raising money from others:"


 


My client has raised nearly $500,000,000.00 (yes, million) for charities in recent years. Being such a powerful fundraiser, we don't want to limit her work to channeling through existing 501c3s.


 


While we will mention working with established NGOs, how can we safely mention raising money without always specifying where it will go? Should we talk about "developing fund raising" for existing orgs and leave open such development as an activity unto itself? So, generalize on the activity of fundraising itself, or include the mention of doing it for projects not through existing orgs?


 


Thanks!

Expert:  Irwin Law replied 1 year ago.
The simplification refers to supporting only 501c3 qualified organizations, but, as you say, that would be a limiting factor. She has raised $500m? WOW! My compliments. Obviously she doesn't want to limit herself to existing 501c3s, but apparently her not being one herself hasn't limited the scope of her efforts.

You asked: how can we safely mention raising money without always specifying where it will go? I am not sure what you mean by specifying where it will go. Your foundation bylaws will state the charitable purposes where the money will be spent, including the area, i.e. world wide. I don't think you need to state exact details of where the money goes in your application. The overseas activities should not be a problem unless most of the money comes from corporations rather than individuals. I'll confess that this is not my "long suit" in this area. I ran across this article which judging from the URL appears to be excerpted from an IRS publication. You might find it helpful. http://www.irs.gov/pub/irs-tege/eotopico83.pdf
I hope this clarifies my previous post.
Irwin Law, Attorney
Category: Legal
Satisfied Customers: 4839
Experience: Lawyer & Real Estate Broker, 30+ years, foreclosure, land contracts, inheritance, probate.
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