Can private foundations pay for food at board meetings?
Yes, private foundations can pay for breakfast, lunch, or dinner at board meetings using organizational funds. Providing food at board meetings is not only permissible but can also be a strategic practice. It can help create a spirit of camaraderie among board members and foster a more productive team dynamic. Sharing a meal sends a signal that the meeting is valuable and that board members are appreciated, which may enhance their commitment to the foundation's mission.
According to IRS guidelines, the provision of food or beverages should not be lavish or extravagant, but a proper meal from a reputable restaurant is generally considered acceptable. As long as the meal expenses are reasonable, they are treated as an incidental benefit and do not trigger self-dealing rules or count as compensation.
While some foundations, especially smaller ones, may choose not to cover meal expenses to reduce operating costs, it can still be a beneficial practice to include food at board meetings. For frugal organizations, there are alternative approaches to consider. Board members can either individually cover the cost of their meals, or the foundation's leadership can arrange potluck-style gatherings where each board member contributes a dish to share. This way, the foundation can save on expenses while still allowing board members to benefit from the sense of camaraderie and team-building dynamics that come with sharing a meal.
In summary, private foundations can pay for food at board meetings, provided the expenses are reasonable and not excessively extravagant. Sharing meals can enhance teamwork and board member engagement while staying within the bounds of IRS regulations.
Seeking expert guidance? We're here to help!
At CPA KPA, we're passionate about magnifying the positive impact of private foundations. Feel free to reach out to us anytime at 888-402-1780 for a complimentary and obligation-free conversation. You can also conveniently submit your questions and inquiries through our contact page. Let's connect today and explore how we can help your foundation have a lasting and meaningful impact!