Lessons Learned at the Rocky Mountain Tax Seminar

Last week I had the privilege of attending the Rocky Mountain Tax Seminar for Private Foundations hosted by El Pomar Foundation. As a graduate of the Manhattan School of Music and a violinist by training, the thought of studying tax law for three days was daunting. Regardless, the information I learned will be invaluable as I embark on my new career.

In June, I moved from the El Pomar Fellowship Program to become the Executive Director of the Bee Vradenburg Foundation, an organization committed to supporting a thriving and diverse arts and cultural community in the Pikes Peak region. In this new capacity, I am responsible for the day to day operations of a private foundation providing funding to local arts organizations. As the Executive Director and only employee, it is pertinent to understand tax laws, regulations, and my responsibilities as the leader of a foundation. The Bee Vradenburg Foundation, much like El Pomar, is a 501(c)3 private foundation, an institution that awards grants using investment income from the corpus. To maintain 501(c)3 status, there are several important regulations all private foundations must be aware of. Obviously I’m not a tax lawyer, but a few of these essential regulations include:

  • Know who is a disqualified person (directors, officers, trustees, managers, contributors and immediate family members) and don’t engage in prohibited action with them
  • Never use the word “earmark” in grant agreements or award letters
  • Don’t lobby

Although this is a list of what not to do, the Tax Seminar is really much more than that. It is designed to update trustees and managers of private foundations on new developments at the IRS while providing ample opportunities for networking, discussion, and problem solving among attendees.

 

Rocky Mountain Tax Seminar

The three day seminar featured a myriad of lectures by outstanding faculty including: the Uniform Prudent Management of Institutional Funds Act (UPMIFA), self dealing, and grant agreements, as well as topics like program related investing. I particularly enjoyed the session on innovative grants to fiscal sponsors, as the Bee Vradenburg Foundation often works closely with individual artists that do not have tax-exempt status. Above all, each session informed attendees about the rules and regulations we must observe to work in accordance with the law and positively influence the communities we serve.

Needless to say, I did not arrive in my current position because of my love for tax law, however this is not an excuse for sloppiness. In fact, it means our sector must take extra caution to preserve the public trust that comes with a 501(c)3 certificate. Being a tax-exempt organization is a privilege and includes responsibilities that must be taken seriously. El Pomar Foundation is keenly aware of this fact and, through sponsorship of the Rocky Mountain Tax Seminar, takes an important step toward sharing this understanding with other private foundations around the country. Educating other foundations on the importance of understanding tax law and empowering them with the knowledge and networks to be successful in their adherence to best practice is an wonderful service to the philanthropic community.

David Siegel

 

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