Q: Our foundation’s third generation is coming on the board and some have young children. Some family members say the lack of child care during board meetings hinders participation. Can the foundation pay for child care so that parents can attend board meetings?

A: Generally no.

According to Andrew Schulz, Deputy General Counsel of the Council on Foundations, such payments are acts of self-dealing and illegal unless they are treated as taxable income to the board member. As with staff members, if an employer provides daycare or pays for it directly to a third party, it’s considered taxable income. If such payments are not reported as income on a Form 1099 or W-2, they would constitute self-dealing, and the foundation risks serious penalties.

You can compensate board members as long as their compensation is reasonable and necessary. You can reimburse them for their out-of-pocket expenses for travel and food and other related expenses—like taxi cabs and tips—but not for the personal expenses that enable them to travel—like child care, kennel services, and house-sitting.

Q: How can we help a group of preteens evaluate which philanthropic organizations they should support?

A: In her book The Giving Family: Raising Our Children to Help Others, Susan Price, Vice President of the National Center, suggests using these questions:

  • How solid is the organization? How long has it existed? Does it have strong leaders?
  • How does the organization address community needs?
  • Who does the organization serve? How many are served annually?
  • Does the organization have wide community support?
  • What does the organization plan for the future?

These questions give you a starting point for discussing where the youths’ funds may make the most difference.

Q: We recently sold the family business, and the resulting windfall puts us in a position to make a real difference. But we’re not ready to just put ourselves out there. When should we give privately and when should we give anonymously?

A: Some of the best advice we’ve received on this issue is to ask whether or not taking some sort of credit serves the gift, the grantee, and your own values. If taking some credit will help the grantee attract more dollars, serve more people, and encourage you to give again (we all love a little acknowledgment now and then), then allow yourself some recognition and publicity. If taking some credit might draw attention away from the grantee’s work, interfere with it, distract your family from your larger program goals, or make you uncomfortable, consider giving anonymously.

For more on this issue, see:

  • Privacy and Publicity,” an article from our newsletter, Family Giving News.
  • The chapter on communication in our book Splendid Legacy.