GuideStar Releases Free Report about New IRS Regulations for Grantmakers and Philanthropic Donors

New Report Details the Steps That Must Be Taken before Making a Grant or Charitable Contribution
Release date: August 18, 2011

Washington, D.C.—GuideStar—the leading source of nonprofit information—has released a new report, "New Rules for Grantmakers and Donors: An Overview for Private Foundations, Organizations Sponsoring Donor-Advised Funds, and Donors," detailing the Internal Revenue Service (IRS) updates to rules under which grantmakers and donors can make grants and charitable contributions. The report, which can be downloaded for free, reviews the necessary steps that must be taken as well as the importance of documenting due diligence, and what can happen if people or organizations donate to nonprofits without doing research, if grantor and contributors use the wrong sources for their due diligence, and if they don't correctly document their research process.

"The IRS's regulatory updates affect a broad spectrum of the nonprofit community, including 501(c)(3) private foundations, organizations sponsoring donor-advised funds, community foundations, corporate giving programs, federated giving programs, philanthropic donors and donors advisors," said Bob Ottenhoff, president and CEO of GuideStar. "GuideStar knows that these rules can sometimes be difficult to interpret, so we've created this report as a handy reference for all those with a vested interest in complying."

Among the questions answered in "New Rules for Grantmakers and Donors: An Overview for Private Foundations, Organizations Sponsoring Donor-Advised Funds, and Donors" are:

  • How does inclusion on the Automatic Revocation Exemptions List affect a nonprofit's eligibility to receive a grant or charitable contribution?
  • Which sources does IRS Revenue Procedure 2011-33 direct grantors and contributors to use to research a nonprofit's charitable and supporting organization status?
  • What circumstances can require a grantmaker to exercise expenditure responsibility?
  • Where can information be found on nonprofits the Office of Foreign Assets Control (OFAC) has named as engaging in or supporting terrorism?
  • What can happen if you make a grant or contribution to an ineligible nonprofit?

"Prevention really is the best medicine when it comes to IRS compliance," added Ottenhoff. "Failing to do your homework can end up costing a person or an organization money—or, in the case of nonprofits on the OFAC list, even a place on the wrong side of the courtroom. I encourage everyone in the nonprofit community to download our report today."

Prepared by GuideStar staff and available for free download, the report also:

  • reviews the steps grantors and contributors must take to comply with revised requirements published in IRS Revenue Procedure 2011-33;
  • outlines the importance of documenting this research;
  • discusses the consequences of failing to follow the new IRS rules; and
  • provides a convenient checklist to help grantmakers and donors keep their charitable contributions 100 percent IRS compliant.

"For some time now GuideStar has been advising both grantmaking organizations and individual philanthropic donors to mitigate their risk through proper research," stated Ottenhoff. "Our due diligence tool, GuideStar Charity Check, provides the necessary eligibility information for any and all of these IRS procedural rules in one easy-to-read report. If someone wants to save time and protect his or her organization—or him- or herself—from IRS penalties, I encourage him or her to check it out."

For more information or to download the free report, please visit

About GuideStar

GuideStar,, connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.

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