Can private foundations pay travel expenses? 

Yes, a private foundation can pay for reasonable and necessary travel expenses that further the foundation’s charitable goals. Even disqualified persons (foundation insiders, substantial contributors, and their families) are allowed to travel at the foundation’s expense if the traveler is conducting official foundation business. However, it is very important for foundations to avoid any expenses that could be construed as being of a personal nature. If a foundation pays for the personal travel expenses of disqualified persons, then the foundation is guilty of self-dealing. This can result in severe financial penalties and the revocation of the foundation’s 501(c)(3) status. 

To illustrate, it is perfectly acceptable for a foundation to pay for a foundation director to travel to Miami to attend a legitimate conference on a topic relating to the foundation’s charitable mission. However, if the director also brings their family to Miami and the foundation pays for it, then there is a clear violation of the self-dealing rules and trouble will start brewing. 

As long as the main purpose of a trip is to conduct foundation business, it is acceptable for the trip to have a component of personal pleasure mixed in. If, however, the main purpose of the trip is personal, then the foundation cannot legally foot the bill. Beyond legal considerations, if certain travel has personal pleasure mixed in, foundations would be prudent to consider whether such travel is consistent with the foundation’s values and ethics. Foundations are legally and ethically required to steward their assets to further their charitable goals for the public good.

Also, it may be sensible to consider how the travel would be perceived through the lens of public perception. Does it pass the front-page test? How would the public react if the travel was reported on the front page of the local newspaper?  If the answer leads you to an uncomfortable place, then perhaps the safest approach is to skip any travel that isn’t necessary or that has too much entertainment mixed in.

As a wise safeguard, foundations should craft a travel expense policy that addresses conflicts of interest before they occur. Here is a link to an example travel expense policy we provide for free that you can modify and make your own.

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