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Foundation Source / Our Services / Administrative Support

  1. Foundation Administration
  2. Transaction Processing
  3. Compliance Monitoring
  4. Tax Preparation
    & Filings
  • The back-office support all private foundations need for efficient, compliant operations.

    Our efficient back-office systems and operating procedures were designed by legal and tax professionals with extensive private foundation expertise, and honed by the experience that comes from supporting over 1,100 private foundations.

    • General administration: We provide a full array of support services that range from processing grants, expenses, and fees, to document management.
    • 5% minimum distribution requirement: We track grants and other qualifying expenditures that count toward the foundation’s 5% annual distribution requirement. Results are updated daily and available for review through the online console provided by Foundation Source.
    • Foundation recordkeeping: We track funding and income, assets and valuations, grants, fees and expenses, substantial contributors, and other foundation-related activities. All data is easily available through the online console provided by Foundation Source.
    • Document archiving: Key foundation documents are organized and stored in a secure, central location with online access and search capabilities.
  • Foundation Source handles a wide variety of foundation transactions.

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    • Donation processing: We record contributions made to the foundation and collect donor information as required for tax purposes.
    • Grant disbursements: We process foundation grants, including the preparation of grant checks and transmittal letters.
    • Fees and expenses: We handle the payment of approved foundation-related fees and expenses, including estimated taxes and state and federal filing fees.
    • Payroll processing: For foundations with paid staff, Foundation Source manages payroll services (provided by an external provider).
    • Transaction accounting: Foundation Source tracks investments and income, and reconciles this data monthly against statements provided by the foundation’s bank or brokerage firm.
  • We monitor foundation activities to help you maintain compliance with IRS regulations.

    • Verification of status as a public charity: Foundation Source reviews grantee organizations to confirm that they are recognized by the IRS as valid 501(c)(3) public charities in good standing at the time of the grant.
    • USA PATRIOT Act due diligence: We check grantee organizations against national and international watch lists of criminal and terrorist organizations and individuals.
    • Grant and expense monitoring: We alert the foundation of grants or expenses that will likely violate IRS rules for self-dealing, jeopardizing investments, taxable expenditures, excess business holdings, etc.
    • Affiliations with other nonprofits: We check for grants going to organizations controlled by foundation insiders. In those situations, we ensure that clients and nonprofits are aware of the related IRS regulations.
    • Substantial contributors tracking: We identify significant contributors to the foundation, who are considered foundation insiders and therefore subject to self-dealing and other regulations
  • Our tax and legal staff know the ins and outs of every specialized filing required for private foundations.

    Our tax and legal staff know the ins and outs of every specialized filing required for private foundations.

    • Annual IRS Form 990-PF: We prepare and file the foundation’s annual 990-PF. Clients are notified when returns are available for review within the foundation’s online Tax Center.
    • State filings: We handle all filings required by the state in which the foundation is domiciled, as well as for other states where filings may be required.
    • Quarterly estimated taxes: We calculate and pay the foundation’s quarterly estimated taxes and recommend strategies that can reduce the tax rate from 2% to 1% in years when the foundation anticipates significant capital gains.
    • Year-end Forms 1099 and 1042: We monitor payments to outside professionals and independent contractors, then prepare and distribute the completed 1099s as applicable (1042s for non-U.S. citizens doing business in the U.S.).
    • Year-end substantiation receipts: Letters are sent to all foundation donors, as required by federal tax laws, to verify their charitable deductions.
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