Botanical fellowship and internship grant procedures are approved

Plain-English summary

A private foundation proposed two educational grant programs in botanical science and art, plant biology, horticulture, gardens, landscape design, plant uses, and conservation. One would make generally short-term fellowships and internship awards to students, professionals, and practitioners; the other would make single- or multi-year fellowships through an intermediary organization to early-career post-undergraduate or postdoctoral scholars. Expert committees would select recipients based on promise, accomplishment, skill, and potential contribution. The foundation would exclude insiders, require annual or final reports, review continued progress, recover diverted funds when appropriate, and keep complete grant records. The IRS approved the procedures under section 4945(g)(3), so grants made as proposed would not be taxable expenditures.

Ruling snapshot

• Question: Did the foundation's botanical fellowship and internship procedures satisfy the advance-approval requirements for educational grants to individuals?
• Outcome: Approved under section 4945(g)(3).
• Key authorities: IRC §§ 74(b), 117(a), 170(b)(1)(A)(ii), 170(c)(2)(B), and 4945(g)(3); Treas. Reg. § 53.4945-4(c)(1)

Full text (IRS public release)

[Redaction note: the IRS release substitutes letters and generic amounts for the program names, library, grant counts, and dollar amounts, and blanks the foundation's identity, employer identification number, contact information, and addressee.]

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

Release Number: 201808022
Release Date: 2/23/2018 Employer Identification Number:
Date: November 30, 2017

                                                           Contact person - ID number:

                                                           Contact telephone number:

LEGEND UIL: 4945.04-04

B = program 1
C = program 2
D = library
e = number
f dollars = amount
g = numbers
h dollars = amount

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

Your letter indicates that you will operate educational grant programs called B and C.

The purpose of B and C is to advance the understanding of botanical science and art,
plant biology, gardens, landscape design, the uses of plants and plant conservation. Your
grant programs will support practitioners, students, scholars and professionals who
demonstrate promise, talent and expertise in plant-, landscape- and garden-related fields
by offering financial awards, support, guidance, and, in certain cases, mentorship
opportunities to enable grantees to deepen their education, experience and skills in these
fields.

2

You have identified two varieties of grant programs you plan to offer. The first grant
program is the B. You will provide fellowship grants and internship awards, generally of
one year or less, to individuals who possess a high level of promise, talent, ability and
expertise in areas of study that further your charitable mission. These areas include, but
are not limited to, the ecology and evolution of plants, the art of plants, gardens and
landscape design, horticultural practice, and the uses of plants, including sustainable
agriculture. Recipients may be students, professionals or aspiring practitioners, including
rising or well-established leaders in the aforementioned fields. The program will provide
direct financial support to deserving candidates seeking to improve their skills or talents
in these fields. Accordingly, the awards will cover expenses in furtherance of these
objectives, including research and study in the aforementioned fields, and professional
travel costs, such as fees and expenses associated with participation at exhibitions or
academic conferences and visits to D.

Your second grant program is the C. You will award single or multi-year fellowship grants
to individuals at the post-undergraduate or post-doctoral level who are early in their
careers. The fellowship program will be a collaborative endeavor involving an
intermediate grantee organization, which will directly receive the grant funds and
distribute them to individual grantees jointly selected by you and the partnering
organization. Fellows will be chosen among individuals working or studying in areas
related to plants, gardens and landscapes. The objective of the program will be to cover
fellows’ expenses related to the pursuit of intellectual and educational projects and
endeavors that advance science, arts and humanities as they relate to plants, gardens
and landscapes. Fellows will base themselves at your partnering organization, but you
will also host them each year so that they may visit and utilize the facilities of the estate
and library, research its collections, and receive support and guidance, and in some
cases directed mentoring.

The exact quantity and amount of B and C awarded each year will depend on a number
of factors, including the quantity, qualifications, and particular needs of the applicants and
will be determined at your discretion. You anticipate you will award approximately e
grants for an estimated total amount of f dollars, and g of the C grants for an estimated
total amount of h dollars.

Information about your grant programs may be available through a number of
outlets, such as your website, newsletter and blog; other websites and online grant
databases; social media; correspondence with administrators or faculty at colleges,
universities, museums, and libraries; application invitations distributed by electronic
and/or regular mail to individuals interested or working in plant-, garden- and landscape-
related fields; and calls for applications sent to organizations involved in such fields.

The B program will generally be open to students and professionals who possess at least
a high school or equivalency diploma and an interest in plant-, garden-, or landscape-
related fields. In certain cases, recipients may be selected among students enrolled in or
graduating from—or professionals affiliated with—particular artistic, academic, scientific
or other such institutions.

Letter 4779 (10-2012)
Catalog Number 58222Y

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Individuals at the post-undergraduate or post-doctoral level in plant, garden, or landscape
sciences will generally be eligible to apply for C. In some cases, these fellowships may
be open to a smaller pool of scholars who—as the emerging preeminent experts in a
distinctive sub-discipline of plant, landscape and garden sciences that you wish to foster -
are understood to be qualified to carry out the program’s purposes.

The grant programs will support students and scholars who show exceptional promise,
ability, and expertise in areas of study that further your charitable mission. Accordingly,
the primary criteria for the selection of B shall include, but are not limited to,
demonstrated ability, talent, achievement or skill in botany, landscape design,
horticulture, garden art, plant studies and similar fields; commitment to these fields; and
potential for significant contribution to and/or leadership in these fields. Individuals’
originality or diversity of perspective, ability to integrate theory and practice, and
approach may also be taken into consideration.

C will be chosen largely based on the same criteria as B, but with an emphasis on higher
levels of promise or accomplishment in areas of science, arts and humanities relating to
plants, gardens and landscapes.

Your selection committee for B will be composed of distinguished experts in plant-,
garden-, and landscape-related fields and chaired by a member of your staff. In certain
cases, you may enlist a nominating committee, comprised of staff and/or independent
experts, to do an initial-round review of applications and choose a pool of fellowship
semi-finalists, from which the selection committee will select the final recipients.

The C program will entail a selection process whereby a member of your staff and a
member of the intermediary institution receiving and disbursing the original grant money -
will choose grant recipients together.

No grants will be awarded to your founder, creator, officers, board members, or staff, or
their families, or any disqualified person.

Recipients of multi-year fellowships must submit annual and final reports fully accounting
for the funds received under the grant and describing their progress and/or
accomplishments with respect to the grant. Your continued support will be contingent
upon at least yearly reviews of such progress. Recipients participating in fellowship or
internship programs of one year or less in duration will be required to submit final reports
providing the information described above.

When a required annual or final report is not submitted, if the submitted report is
unsatisfactory, or if you learn that all or any part of the funds from a grant you have
awarded are being diverted from their intended purposes, you will take all reasonable and
appropriate steps to recover the funds and/or ensure restoration of the diverted funds to
the purposes of the program. This would include legal action if such action is deemed
appropriate under the circumstances.

Letter 4779 (10-2012)
Catalog Number 58222Y

4

You will retain complete records with respect to all grants awarded, as required by the
applicable Treasury regulations. These records will include all information obtained by
you to evaluate applicants, the identification of recipients, the completed application of
each recipient, the amount of each grant, periodic reports from recipients, and any
additional information that you have obtained during the grant administration process.

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.

• 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

Letter 4779 (10-2012)
Catalog Number 58222Y

5

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.

We've sent a copy of this letter to your representative as indicated in your power of
attorney.

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,

Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

Letter 4779 (10-2012)
Catalog Number 58222Y