Grant Agreement
ARTICLE II
GENERAL CONDITIONS
The Grantee accepts and agrees to comply with the following General Conditions:
1. PURPOSE. The grant shall be used solely for the purpose specified in Article I of this Grant Agreement (the "Agreement") and shall be so designated on the Grantee's records.
2. PROGRAM MONITORING AND EVALUATION. The Fund may, at its expense, monitor and conduct an evaluation of operations under this grant, which may include visits by representatives of the Fund to observe the Grantee's procedures and operations in connection with this grant and to discuss the grant with the Grantee's personnel.
3. ACCOUNTING RECORDS AND FINANCIAL REVIEW. The method of recording receipts and disbursements related to this grant on the accounting records of the Grantee is outlined in Article II, Section 4, below. Vouchers consisting of bills, invoices, cancelled checks, receipts, etc., which document the disbursement of funds for this grant, shall be retained by the Grantee for at least two years after final disbursement of the grant and may be examined by representatives of the Fund on reasonable notice during regular business hours. Copies of such documents shall be furnished to the Fund at its request and expense. The Fund may, at its expense and on reasonable notice to the Grantee, inspect, audit, or copy the Grantee's records pertaining to this grant.
4. ACCOUNTING AND FINANCIAL REQUIREMENTS.
4.1. If the purpose of this grant is for general and/or operating support, no special requirements are specified for the method of recording receipts and disbursements on the Grantee’s accounting records for this grant.
4.2. If the purpose of this grant is to support a project (that is, any purpose other than for general and/or operating support), the use of grant funds is restricted solely to the purpose of the grant and should be so designated on Grantee accounting and financial records. Under no circumstances may grant funds be expended, borrowed (inter-fund), pledged, or transferred for reasons unassociated with the stated purpose of this grant. For purposes of controlling and reporting on the receipt and disbursement of grant funds, Grantee accounting records should be structured so that such transactions are easily and readily identifiable.
4.3. Whether for general or specific project use, the grant funds shall not be expended, transferred, or used for any purpose or in any fashion that is prohibited by an applicable law of the United States or of any domestic or foreign jurisdiction, including without limitation, applicable laws proscribing the support of terrorism or terrorist organizations. Furthermore, the grant funds shall not be used for purposes that discriminate in either policy or practice against people because of their age, race, color, national origin, ethnicity, creed, religion, cultural beliefs, disability or sex, including sexual orientation or gender identity and expression.
5. PAYMENT SCHEDULE. The schedule of grant payments set forth in Article I is a preliminary estimate of the timing and amount of cash remittances to the Grantee that shall meet satisfactorily the requirements of the grant. The Fund, however, on its own initiative or at the request of the Grantee, may modify scheduled dates and payment amounts and shall so notify the Grantee when and if such changes are forthcoming.
6. REPORTING. In accordance with the schedule in Article I, Section 5, of this Agreement (the “Reporting Schedule”), the Grantee shall furnish to the Fund written reports acceptable to the Fund on both the progress of the program according to the proposed measurable results and the financial management of the grant according to the proposed budget. Follow instructions on the Grant Reporting page of the Fund’s website.
If accurate and complete financial and program reports are not furnished to the Fund on or before the required dates reflected in the Reporting Schedule and the Fund agrees to an extension of such dates, the Fund shall not be required to disburse related payments until the end of the fourth full calendar quarter after the quarter in which such delinquent reports are furnished.
Upon request, the Grantee also shall furnish a copy of its annual financial statements to the Fund for each year which is included partially or wholly within the grant period or as otherwise specified in the Special Conditions. These statements should include a balance sheet, income and expense statement, and any footnotes or supporting schedules that shall permit a satisfactory determination of the financial condition of the Grantee.
7. CANCELLATION OF GRANT. If the Grantee fails, within 30 days after notice from the Fund, to perform any of its duties under this Agreement, the Fund may at any subsequent time by notice to the Grantee postpone, cancel or postpone and thereafter cancel payment of the undisbursed portion of the grant.
8. WITHDRAWAL OF GRANT. After entering into a grant agreement, it is possible that circumstances shall arise which shall persuade the Fund that an unpaid grant should not be disbursed. If that should happen with respect to this grant, the Fund acknowledges that the Grantee, nevertheless, would then be entitled to full reimbursement for reasonable expenses connected with the grant and already paid by the Grantee or for which it became legally responsible before notification of the Fund’s decision. Accordingly, the Fund may at any time, with or without cause, cancel the unpaid portion of this grant by notice to the Grantee. As soon as possible after such notice, the Grantee shall furnish a complete list of such expenses, and the Fund thereupon shall pay to the Grantee an amount equal to the total of those expenses (not to exceed the unpaid portion of the grant). After making such payment, the Fund shall have no further obligation to the Grantee, its officers, agents, or representatives.
9. REVERSION OF GRANT. If the purpose of this grant is to support a specific project or to provide general and/or operating support for a specific period, any portion of the grant unexpended at the completion of the project or at the end of the grant period (as described in Article I, Section 3) shall be repaid to the Fund within 30 days unless the Fund, in its sole discretion, shall otherwise specify in writing.
10. PUBLICITY. The Grantee may acknowledge the Fund’s support in any or all announcements and written materials. Please list any such acknowledgments as “The Clowes Fund.” You may describe the Fund as “a family foundation established in 1952, in Indianapolis, Indiana, that makes grants in Indianapolis, Massachusetts and northern New England to support human services, education and the arts.” You may email staff@clowesfund.org to request a digital copy of the Fund’s logo. An electronic copy of any announcements, including newspaper or magazine articles, relating to this project must be submitted with the Grantee’s final report.
11. LICENSE. Materials submitted by the Grantee including, without limitation, the application, proposals, attachments, financial information, budget, and self-evaluation reports and photographs (the “Materials”), may be donated to a nonprofit archival institution. Accordingly, the Grantee grants to the Fund a perpetual, irrevocable, royalty free license to use, reproduce, create derivative works, distribute, and publicly display the Materials, in complete or partial form, and in any and all forms or media format now or hereafter known. Materials may be used for any purpose, without the Grantee’s consent or any compensation to the Grantee or anyone else. The Grantee hereby releases, discharges, and holds harmless the Fund from any and all liability arising out of the Materials. In no event shall the Grantee have the right to enjoin the production, display, publication, distribution or exploitation of the Materials. All permissions and releases by the Grantee herein shall be irrevocable and effective in perpetuity and throughout the world, and apply to the Fund and its assigns, sub-licensees, successors, and agents.
12. GUIDELINES AND SPECIAL CONDITIONS. Grant or program guidelines previously or contemporaneously issued with respect to this grant are hereby incorporated by this reference to the extent they do not conflict with this Agreement. The Grantee also accepts and agrees to comply with the Special Conditions, if any, attached to this Agreement, which also are incorporated by this reference. Any conflict among the Special Conditions, General Conditions, other Agreement terms, and guidelines (if any) shall be governed first by the Special Conditions, next by the General Conditions, next by the other terms of the Agreement, and finally by the guidelines.
13. ADDITIONAL SUPPORT. By making this grant, the Fund assumes no obligation to provide other or future support for the Grantee.
14. NOTICES. Notices under this Agreement shall be in writing and shall be deemed to be given when delivered via mail or e-mail as follows:
To the Clowes Fund:
Megan B. Reilly, Executive Director
The Clowes Fund, Incorporated
320 North Meridian Street, #316
Indianapolis, Indiana 46204
staff@clowesfund.org
To the Grantee:
As provided in Article I, Section 1, of this Agreement.
15. WAIVER. No waiver of any right under this Agreement shall be effective unless set forth in a notice from the party possessing such right to the other party, and the exercise by either party of any right or remedy under this Agreement shall not thereafter prevent that party from exercising any other right or remedy.
16. INDIANA LAW. The law of the State of Indiana exclusively shall govern and apply to all legal proceedings pertaining to the Agreement, or otherwise concerning the subject matter of this Agreement, and under no circumstance shall reference be made to the law of any other jurisdiction for any purpose. This Agreement shall be deemed to be entered into and formed in Indiana and shall become effective when the Clowes Fund receives a fully executed Agreement, bearing the Grantee's signature, at the offices of the Fund in Indianapolis, Indiana. All legal proceedings pertaining to the Agreement, or otherwise concerning the subject matter of this Agreement, shall be heard exclusively in the state or federal courts with subject matter jurisdiction sitting in Indiana. By execution of this Agreement, the Grantee submits to the personal jurisdiction and venue of such courts for such purposes.
17. GIFT REFUSAL POLICY. In the spirit of assuring the maximum charitable use of philanthropic assets, The Clowes Fund (the Fund) requires its officers, directors, members and staff to decline any and all gifts of tangible property (other than token items of nominal value), cash or investment assets from any non-profit or for-profit entity where such gift is associated, directly or indirectly, with proposals to or grants made by the Fund. Such gifts are to be politely refused and returned to the sender. Furthermore, in embracing the highest ethical standards, the Fund requires its officers, directors, members and staff to exercise discretion when considering invitations to events, performances, programs, luncheons or other activities from past, present or potential grantees.
18. STATEMENT OF NONPROFIT AFFILIATIONS POLICY. The purpose of the Statement of Nonprofit Affiliations* is to assure full disclosure and open communication to help identify any situation where a possible conflict of interest may exist between a person acting in an official capacity for The Clowes Fund and a particular nonprofit agency. (*Affiliation is defined as an employee or member of the governing body.) A Statement of Nonprofit Affiliations should be completed by every member of the board of directors, grants committee and staff, and filed with the Foundation’s records. If a Fund member finds himself/herself involved in a discussion regarding a nonprofit organization with which he/she has an affiliation, he/she should:
- Make a statement of disclosure of the affiliation;
- Be available for discussion of the organization; and
- Recuse himself/herself from voting regarding the organization.
19. SPECIAL REQUIREMENTS FOR GRANTS TO 509(A)(3) SUPPORTING ORGANIZATIONS. The Pension Protection Act of 2006 (PPA), although directed primarily at reforms to the nation’s pension system, also included several amendments to the statutes governing charitable contributions and charitable organizations. In light of the PPA, a private foundation, such as The Clowes Fund, must take extra precautions when making grants to charitable organizations that are classified as "supporting organizations" in Internal Revenue Code section 509(a)(3).
Pursuant to the applicable provisions of the PPA, which are now codified in the Internal Revenue Code and amplified in the United States Treasury Regulations and guidance published by the Internal Revenue Service (IRS), a private foundation is limited in the grants it may make to certain types of supporting organizations. Those provisions effectively prohibit grants by a private foundation to:
- Non-functionally integrated Type III supporting organizations; and
- Type I, Type II and functionally integrated Type III supporting organizations that are controlled directly or indirectly by the private foundation’s officers, directors, or other disqualified persons.
Type I and Type II supporting organizations generally are characterized by a significant degree of overlap in their governance structures with the public charities that they support; for example, having a majority of the supporting organization’s Board appointed by its supported organization(s) or by another organization that also controls the supported organization(s). Functionally integrated Type III supporting organizations generally are characterized by a substantial and responsive engagement with their supported public charities. Non-functionally integrated Type III supporting organizations are connected more loosely with their supported public charities (sometimes with no board overlap or substantial engagement with activities), and thus they may have neither (i) the degree of operation, supervision or control by or connection with their supported public charities as do Type I or Type II supporting organizations nor (ii) the same degree of operation in connection with their supported public charities as do functionally integrated Type III supporting organizations.
While the IRS historically did not include a Type I, II or III designation in determination letters issued to supporting organizations, most supporting organizations’ determination letters issued after the PPA’s implementation do reflect such a designation. Based on published guidance from the IRS, however, if you are classified as a supporting organization, the Fund will ask you to submit:
- Your organization’s most recent IRS determination letter, including any updates or changes;
- Your organization’s current Articles of Incorporation, Bylaws or other governing documents;
- A completed copy of The Clowes Fund’s Supporting Organization Information Request Form.
In addition, the Fund will confirm your organization’s tax-exempt status in Publication 78, Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986, via an online platform that verifies an organization’s public charity classification in the IRS Exempt Organizations Business Master File Extract, updated monthly.
