Private foundations must abide by certain tax rules, and when they get into trouble, it’s often because they’re unaware of the laws or uncertain of what they need to do to stay in compliance. For example, Treasury regulations require that private foundations verify the public charity status of any 501(c)(3) charitable organization before making a grant to ensure that the grantee is currently classified as a public charity. However, misconceptions about when it’s necessary to validate the tax status of a grantee—or even how to do it—are common.
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Using Private Foundations and Donor-Advised Funds Together