Form 990-PF Updates: A 2014 Review for Private Foundations

Unlike the dramatic changes made to various sections and versions of Form 990, Form 990-PF saw relatively minor updates for 2014—namely, to the statements regarding activities and the codes that indicate a grantee’s status.

Statements Regarding Activities

Part VII-B, Statements Requiring Activities for Which Form 4720 May be Required, has a revised Question 5a(4).

Generally, a grant by a private foundation to a public charity isn’t a taxable expenditure as long as the private foundation doesn’t earmark the grant for any prohibited activities and there’s no oral or written agreement that may cause the grantee to engage in a prohibited activity or select the grant recipient. Prohibited activities include:

  • Carrying on propaganda or otherwise attempting to influence legislation
  • Influencing the outcome of any specific public election or carrying on (directly or indirectly) any voter registration drive
  • Providing a grant to an individual for travel, study, or other similar purpose, unless the foundation awards the grant on an objective and nondiscriminatory basis using a procedure approved in advance by the IRS
  • Providing a grant to an organization other than a charitable organization and certain others described in Section 4945(d)(4)(A)
  • Providing for any purpose other than religious, charitable, scientific, literary, educational, or the prevention of cruelty to children or animals

In 2014, the form instructions for this question have been revised in accordance with Section 4945(d)(4).

Grant Recipient Codes

The IRS made significant changes to Part XV, Supplementary Information, in 2013 by adding specific codes for grant recipients. The goal was to determine whether private foundations were performing due diligence on grant recipients and exercising expenditure responsibility. The 2014 Part XV instructions have further revised the codes for the status of these recipients.

All the recipient codes are listed below, alphabetically, for easy reference. Note that two new codes, GOV and I, marked with an asterisk below, were added, and the NC code was modified.

We're Here to Help

While the 2014 changes weren’t great in number, there could be an impact to your organization—and you may need to spend some additional time reviewing your foundation’s grants and grantees. For help analyzing your grants or completing your organization’s Form 990-PF, contact your Moss Adams advisor.