Emergency management fellowship procedures receive approval

Plain-English summary

A private foundation proposed a research fellowship for experienced emergency management professionals and scholars. Fellows would study disaster communication, logistics, hazard mitigation, or environmental resource protection and present their results at the foundation's annual conference. Applicants had to meet education or experience requirements, submit research materials and recommendations, and undergo credential review and possible interviews. An expert selection committee would choose recipients under a structured review process, relatives of insiders were excluded, and the foundation would maintain records and supervise the grants. The IRS approved the procedures under section 4945(g)(3), so expenditures made under them would not be taxable expenditures.

Ruling snapshot

• Question: Do the proposed emergency management research fellowship procedures satisfy the advance-approval requirements?
• Outcome: Approved, grants made under the procedures will not be taxable expenditures.
• Key authorities: IRC §§ 74(b), 117(a), 170(c)(2)(B), and 4945(g)(3); Treas. Reg. § 53.4945-4(c)(1)

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
P.O. Box 2508
Cincinnati, OH 45201

Release Number: 201519036
Release Date: 5/8/215 Employer Identification Number:
Date: 2/12/2015

Contact person - ID number:

Contact telephone number:

LEGEND UIL: 4945.04-04

X= Location

Dear

You asked for advance approval of your educational grant procedures under Internal
Revenue Code section 4945(g)(3). This approval is required because you are a private
foundation that is exempt from federal income tax.

Our determination

We approved your procedures for awarding educational grants. Based on the information
you submitted, and assuming you will conduct your program as proposed, we determined
that your procedures for awarding educational grants meet the requirements of Code
section 4945(g)(3). As a result, expenditures you make under these procedures won't be
taxable.

Description of your request

You founded your own think tank to improve and enhance the readiness and
professionalism of the emergency management community through education and
research. You will establish a Fellows Research Program to advance your mission.

Outstanding candidates will be selected by a selection committee to participate in the
program as fellows. Fellows will conduct research in the following areas: disaster
communication/risk communication, disaster logistics/supply chain management, and
hazard mitigation/environment resource protection. At the end of a fellow’s term in the
Fellowship Program, the fellow will present the results of his or her research at the think
tank’s annual conference. The research results will be presented in the format agreed
upon by your think tank and the fellow.

You will pay for each fellow’s travel expenses to the program headquarters in X and
accommodations while participating in the fellows program. The fellows will also be
provided a stipend to cover incidental expenses while participating in the program.

Eligibility criteria to be selected as a fellow for your program are as follows:

• Be at least twenty-one years of age
• Hold a Ph.D. (or comparable) degree, be a Ph.D. candidate, or possess ten years
or more of equivalent professional experience in the emergency management field
• Have a field of research that is unique and innovative
• Have documented proof of producing unique and outstanding work products
related to emergency management
• Complete the online application form and submit it with all required documents,
which are expected to include:
o Resume and biography, including a publication list
o At least two letters of recommendation from recognized authorities or
professionals in the applicant’s discipline
o One to three authentic work samples produced by the applicant, which may
include a research paper, publication, or article
o A Statement of Purpose: 250-500 word statement describing a proposed
research theme, the applicant’s career goal and/or expectation for
participation in the fellowship program, and how the applicant’s research is
unique or innovative compared to other existing studies
o A detailed research proposal describing a research plan and the applicant's
preparation status. A research proposal should address the elements of
international cooperation and practical approaches or solutions. There are
no standard format requirements
o Completed Fellowship Participation Authorization Form releasing the
applicant to work on the fellowship full-time for the duration of the fellowship
• Demonstrate evidence of good health (physical examination)
• Be proficient in English communication and writing skills

Applicants will be selected by the Fellowship Selection Committee. The Fellowship
Selection Committee will be composed of experts in global emergency management and
disaster resilience who are selected by the think tank’s Board of Directors and
Leadership Team.

The think tank’s staff will conduct an initial screening of each applicant, which may
include an in-person interview, a phone interview, or an electronic interview (e.g.,
teleconference, Skype conference). The staff will also verify credentials, including
contacting any person who has provided a letter of recommendation for the applicant.
The staff will prepare an evaluation of each applicant for review by the Fellowship
Selection Committee, and may rank the applicants from most qualified to least qualified.
The staff will then notify each Fellowship Selection Committee member that the
applications and staff evaluations are available for review and either provide each
member with electronic access to the applications and evaluations or transmit the
applications and evaluations to the members by regular or express mail, facsimile, or
electronic mail.

Letter 4779 (10-2012)
Catalog Number 58222Y

The Fellowship Selection Committee will meet (either in person or electronically) to select
the fellows. The Selection Committee will promptly notify the Board of Directors and
Leadership Team of its decision. The Board of Directors and Leadership Team will be
given ten business days to review the decision of the Selection Committee and object to
the selection of any applicant as a fellow. If the Board of Directors and Leadership Team
do not object to the selection of any candidate within the ten-business day period, the
Selection Committee’s decision shall be final. If there is an objection to the selection of
any candidate within the ten-day period, the Selection Committee, Board of Directors,
and Leadership Team shall cooperate in resolving any disagreement regarding the
selection of an applicant. If the disagreement is not resolved within fifteen business days
of the end of the ten-day period, the decision of the Selection Committee shall be final.

You represent that no relatives of members of the selection committee, or of your
officers, directors, or substantial contributors are eligible for awards.

You will maintain all records relating to individual grants, including information obtained to
evaluate grantees. You will identify whether a grantee is a disqualified person, establish
the amount and purpose of each grant, and establish that you undertook the supervision
and investigation of the grants.

Basis for our determination

The law imposes certain excise taxes on the taxable expenditures of private foundations
(Code section 4945). A taxable expenditure is any amount a private foundation pays as a
grant to an individual for travel, study, or other similar purposes. However, a grant that
meets all of the following requirements of Code section 4945(g) is not a taxable
expenditure.

• The foundation awards the grant on an objective and nondiscriminatory basis.
• The IRS approves in advance the procedure for awarding the grant.
• The grant is:

• A scholarship or fellowship subject to section 117(a) and is to be used for
  study at an educational organization described in section 170(b)(1)(A)(ii); or

• A prize or award subject to the provisions of section 74(b), if the recipient of
  the prize or award is selected from the general public; or

• To achieve a specific objective; produce a report or similar product; or
  improve or enhance a literary, artistic, musical, scientific, teaching, or other
  similar skill or talent of the recipient.

To receive approval of its educational grant procedures, Treasury Regulations section
53.4945-4(c)(1) requires that a private foundation show:

• The grant procedure includes an objective and nondiscriminatory selection
process.

• The grant procedure results in the recipients performing the activities the grants
were intended to finance.

Letter 4779 (10-2012)
Catalog Number 58222Y

• The foundation plans to obtain reports to determine whether the recipients have

performed the activities that the grants were intended to finance.

Other conditions that apply to this determination

This determination covers only the grant program described above. This approval
will apply to succeeding grant programs only if their standards and procedures
don't differ significantly from those described in your original request.

This determination applies only to you. It may not be cited as precedent.

You cannot rely on the conclusions in this letter if the facts you provided have
changed substantially. You must report any significant changes in your program to
the Cincinnati Office of Exempt Organizations at:

Internal Revenue Service

Exempt Organizations Determinations
P.O. Box 2508

Cincinnati, OH 45201

You cannot make grants to your creators, officers, directors, trustees, foundation
managers, or members of selection committees or their relatives.

All funds distributed to individuals must be made on a charitable basis and must
further the purposes of your organization. You cannot award grants for a purpose
that is inconsistent with Code section 170(c)(2)(B).

You should keep adequate records and case histories so that you can substantiate
your grant distributions with the IRS if necessary.

Please keep a copy of this letter in your records.

If you have any questions, please contact the person listed at the top of this letter.

Sincerely,

Director, Exempt Organizations

Letter 4779 (10-2012)
Catalog Number 58222Y