Sample "Expenditure Responsibility" Grant Letter (Grant Letter to Private Foundation)
Dear : The Virginia Hodgkins Somers Foundation, Inc., (the "Foundation") is pleased to inform you that its Directors have approved a grant of $_________ for _________________. This grant is being made in response to your charitable grant application of _________, 200__, a copy of which is attached hereto. The grant funds may not be used for any of the following purposes: 1. To attempt to influence legislation or the outcome of any specific public election; 2. To carry on, directly or indirectly, any voter registration drive;
3. To make grants to individuals or other organizations, which do not comply with the requirements of Section 4945(d)(3) or 4945(d)(4); or 4. To undertake any activities for a non-charitable purpose.
Under the Internal Revenue Code, all grant funds must be expended for charitable, scientific, literary, or educational purposes. This grant is made only for the purposes stated in this letter and the grant funds, as well as the interest earned thereon, may not be expended for any other purpose without the Foundation's prior approval in writing. It is understood that the funds will be used substantially in accordance with the attached charitable grant application and approved budget. Any funds not expended or committed for the purposes of the grant [or within the period] stated above will be returned to the Foundation. You hereby agree to provide annual narrative and financial reports on the use of grant funds to the Foundation and a final report upon completion of the project funded by the grant. Each report should contain a narrative account of what was accomplished by the expenditure of funds (including a description of progress made towards achieving the goals of the grant), a financial accounting according to the categories of the attached approved budget, and copies of any publications resulting from the grant. The financial statement should be attested by a responsible financial officer or a certified public accountant and should reflect the categories stipulated in the attached approved budget. Although the grant funds need not be physically segregated from other funds, the grant funds should be shown separately on your books for ease of reference and verification. Records of receipts and expenditures under the grant, as well as copies of reports submitted to the Foundation, should be kept for at least four years following completion of such receipts and expenditures. Your books and records are to be made available for the Foundation's inspection at reasonable times.
The foregoing conditions are intended to comply with the obligations under the Internal Revenue Code to make reasonable efforts and establish adequate procedures to see that grant funds are used wholly for the purposes for which they are granted, and to obtain full and complete reports on how grant funds have been expended. Changes in the Internal Revenue Code, or in any regulations promulgated thereunder, may require the Foundation to ask that more detailed reports be submitted or that other steps be taken. The Foundation will promptly inform you of any such changes. The Foundation will include information on this grant in its annual information return, and you are authorized to advise the public of this grant by means of a press release. If this letter and its attachments correctly set forth your understanding of the arrangements made regarding this grant, will you please countersign and return the attached copy of this letter to the Foundation. On behalf of the Foundation, I extend every good wish for the success of this endeavor.
Sincerely,
GORDON C. AYER, PRESIDENT
Seen and Agreed to:
By______________________________ Its Date:___________________________