Charitable Grant Agreement

CHARITABLE GRANT AGREEMENT

1. PARTIES AND EFFECTIVE DATE

Grantor: [________________________________________] ("Grantor"), a [501(c)(3) public charity / private foundation] organized under the laws of [____________________].
Address: [________________________________________]
EIN: [__-_______]

Grantee: [________________________________________] ("Grantee"), a 501(c)(3) public charity organized under the laws of [____________________].
Address: [________________________________________]
EIN: [__-_______]

Effective Date: [__/__/____]

2. RECITALS

WHEREAS, Grantor's charitable mission includes funding activities that further the public benefit consistent with IRC § 501(c)(3);

WHEREAS, Grantee is recognized by the IRS as exempt under IRC § 501(c)(3) and as a public charity under IRC § 509(a)(1), (2), or (3);

WHEREAS, Grantor desires to make a grant to Grantee on the terms below, and Grantee desires to accept and administer the grant in accordance with this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants below, the parties agree as follows.

3. GRANT PURPOSE

3.1 — Type of Grant. Check one:

☐ Restricted Grant. The grant funds shall be used solely for the following project, program, or purpose (the "Project"): [________________________________________].

☐ Unrestricted (General Operating) Grant. The grant funds may be used by Grantee in its discretion for any activity within its tax-exempt purposes under IRC § 501(c)(3).

3.2 — Exempt Purposes Only. All grant funds shall be used exclusively in furtherance of charitable, educational, religious, scientific, or other purposes described in IRC § 501(c)(3). No portion of the grant shall inure to the benefit of any private shareholder or individual.

4. GRANT AMOUNT AND PAYMENT SCHEDULE

4.1 — Total Grant. Grantor shall pay to Grantee the total sum of $[____________] (the "Grant").

4.2 — Payment Schedule.

4.3 — Conditions Precedent. Each installment after the first is conditioned on (a) Grantee's continued 501(c)(3) status, (b) timely receipt and Grantor approval of all required reports, (c) achievement of the applicable milestones described in Exhibit A (if any), and (d) Grantee's material compliance with this Agreement.

5. USE RESTRICTIONS

Grantee shall NOT use any portion of the Grant, directly or indirectly, for:

(a) Carrying on propaganda or otherwise attempting to influence legislation within the meaning of IRC § 4945(d)(1), or for grassroots or direct lobbying;

(b) Influencing the outcome of any specific public election, or carrying on any voter registration drive other than as permitted by IRC § 4945(f);

(c) Any grant to an individual for travel, study, or similar purposes without prior written approval and compliance with IRC § 4945(g);

(d) Any expenditure that is not in furtherance of a purpose described in IRC § 170(c)(2)(B);

(e) Any activity that would constitute self-dealing under IRC § 4941 or an excess benefit transaction under IRC § 4958; or

(f) Any purpose outside the scope of Section 3.

6. REPORTING REQUIREMENTS

6.1 — Progress Reports. Grantee shall submit a written progress report describing activities, outcomes, and use of funds:

☐ Annually, within [60] days after each anniversary of the Effective Date; or

☐ At intervals of: [________________________________________].

6.2 — Financial Report. Each progress report shall be accompanied by a financial report itemizing Grant expenditures against the approved budget.

6.3 — Final Report. A final narrative and financial report is due within [90] days after the end of the grant period.

6.4 — Form 990. Grantee shall provide its most recent IRS Form 990 (or 990-EZ / 990-PF) upon request and shall make the return available for public inspection as required by law.

7. RECORDS, AUDIT, AND EXPENDITURE RESPONSIBILITY

7.1 — Records Retention. Grantee shall maintain books and records sufficient to evidence the use of Grant funds for at least three (3) years after the end of the grant period (or longer if required by law).

7.2 — Audit Rights. Grantor (or its designee) may inspect, copy, and audit Grantee's books, records, and Project facilities upon [10] business days' written notice.

7.3 — Expenditure Responsibility (Private Foundation Grantor). If Grantor is a private foundation and Grantee is not a public charity described in IRC § 509(a)(1)–(3), the parties shall comply with the expenditure responsibility rules of IRC § 4945(h) and Treas. Reg. § 53.4945-5, including:

(a) Segregated Account. Grantee shall hold the Grant in a separate fund or segregated account dedicated to one or more IRC § 170(c)(2)(B) purposes;

(b) Pre-Grant Inquiry. Grantee acknowledges Grantor's reasonable pre-grant inquiry;

(c) Written Commitment. Grantee's signature below constitutes the written commitment required by Treas. Reg. § 53.4945-5(b)(3);

(d) Reports. Grantee shall furnish full and complete annual reports on Grant use until funds are fully expended; and

(e) No Diversion. Grantee shall not use Grant funds for any non-charitable purpose, and shall promptly report any diversion to Grantor.

8. GRANT-BACK AND REPAYMENT

8.1 — Misuse. If Grantor determines in good faith that any portion of the Grant has been used for a purpose not permitted by this Agreement, Grantee shall, within [30] days of written demand, repay (or "grant back") the misused amount to Grantor or, at Grantor's election, redirect those funds to a charitable purpose approved in writing by Grantor.

8.2 — Unexpended Funds. Any Grant funds not expended or irrevocably committed by the end of the grant period shall be returned to Grantor within [60] days, unless Grantor approves a written extension or redirection.

9. CLAWBACK FOR NON-PERFORMANCE (MULTI-YEAR GRANTS)

If, with respect to any year of a multi-year Grant, (a) Grantee fails to achieve a material milestone described in Exhibit A, (b) Grantee loses its 501(c)(3) status, or (c) Grantee materially breaches this Agreement and fails to cure within [30] days of written notice, Grantor may, in its sole discretion, (i) suspend or cancel future installments and/or (ii) demand repayment of any portion of the Grant attributable to the year of non-performance.

10. PUBLICATION AND ACKNOWLEDGMENT

10.1 — Acknowledgment. Grantee may acknowledge Grantor's support in publications, websites, and press releases describing the Project, subject to Grantor's reasonable approval of the form and use of its name and logo.

10.2 — Anonymity. ☐ Grantor wishes to remain anonymous and Grantee shall not publicly identify Grantor as the source of the Grant without prior written consent.

10.3 — Work Product. Grantee retains ownership of materials produced with Grant funds and grants Grantor a perpetual, royalty-free, nonexclusive license to use, copy, and distribute such materials for noncommercial charitable purposes.

11. GRANTEE REPRESENTATIONS AND WARRANTIES

Grantee represents and warrants that:

(a) It is duly organized, validly existing, and in good standing in its state of formation;

(b) It is recognized as exempt under IRC § 501(c)(3) and classified as a public charity under IRC § 509(a)(1), (2), or (3), and no proceeding is pending or threatened to revoke that status;

(c) It is not a "supporting organization" described in IRC § 509(a)(3) of a type that would require additional expenditure responsibility (Type III non-functionally integrated, or Type II/III controlled by a disqualified person of Grantor);

(d) It is not debarred, suspended, or otherwise excluded from receiving federal funds, and is not on any U.S. sanctions or terrorism-related watch list (OFAC SDN List);

(e) It has full corporate authority to enter into and perform this Agreement; and

(f) All information furnished to Grantor in connection with the Grant application is true, complete, and not misleading.

12. TERM AND TERMINATION

12.1 — Term. This Agreement is effective from the Effective Date through completion of all reporting obligations.

12.2 — Termination for Cause. Grantor may terminate this Agreement immediately upon written notice if Grantee (a) loses its 501(c)(3) status, (b) materially breaches this Agreement and fails to cure within [30] days, or (c) misuses Grant funds.

12.3 — Effect of Termination. Upon termination, Grantee shall (i) cease incurring Grant-funded obligations, (ii) deliver a final report and accounting within [30] days, and (iii) return all unexpended Grant funds.

13. GENERAL PROVISIONS

13.1 — Governing Law. This Agreement is governed by the laws of the State of [____________________], without regard to conflict-of-laws principles.

13.2 — Independent Parties. The parties are independent contractors; nothing herein creates a partnership, joint venture, agency, or employment relationship.

13.3 — Entire Agreement; Amendment. This Agreement is the entire agreement between the parties on its subject matter and may be amended only in a writing signed by both parties.

13.4 — Assignment. Grantee may not assign this Agreement without Grantor's prior written consent.

13.5 — Notices. All notices shall be in writing and sent to the addresses in Section 1 by personal delivery, certified mail, or recognized overnight courier.

13.6 — Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original.

14. SIGNATURES

GRANTOR: [________________________________________]

By: ___________________________________ Date: [__/__/____]

Name / Title: [________________________________________]

GRANTEE: [________________________________________]

By: ___________________________________ Date: [__/__/____]

Name / Title: [________________________________________]

EXHIBIT A — PROJECT BUDGET AND MILESTONES

SOURCES AND REFERENCES

• 26 U.S.C. § 501 — Exemption from tax on corporations, certain trusts: https://www.govinfo.gov/app/details/USCODE-2024-title26/USCODE-2024-title26-subtitleA-chap1-subchapF-partI-sec501
• 26 U.S.C. § 4941 — Taxes on self-dealing (private foundations): https://www.govinfo.gov/app/details/USCODE-2024-title26/USCODE-2024-title26-subtitleD-chap42-subchapA-sec4941
• IRS Form 990 — Return of Organization Exempt From Income Tax: https://www.irs.gov/forms-pubs/about-form-990