Scholarship Awards Will Not Be Taxable

Contact person - ID number: * * *

You asked for advance approval of your scholarship grant procedures under Internal Revenue Code section 4945(g). This approval is required because you are a private foundation that is exempt from federal income tax. You requested approval of your scholarship program to fund the education of certain qualifying students.

Also, awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified tuition and related expenses (subject to the limitations provide in Code section 117(b)).

Your purpose is to engage in charitable activities by enhancing access to higher education. Specifically, you provide scholarship aid to Y students that are deemed to be worthy of such aid.

The number of scholarships that will be awarded each year and the amount of each scholarship will vary depending on the amount of funds available to be distributed.

The Financial Aid office determines that a student qualifies for financial aid using the Free Application for Federal Student Aid (www.FAFSA.ed.gov) and the CSS Profile (http://student.collegeboard.org/css-financial-aid-profile). The Financial Aid office notifies students that demonstrate the most need of their eligibility for this award.

You will maintain the case histories showing recipients of your scholarships, including names, addresses, purposes of awards, amount of each grant, manner of selection, and relationship (if any) to officers, trustees, or donors of funds to you.

The Trust provides scholarships to students who attend Y and require financial aid. Factors reviewed in the decision making are the students' financial budget, grade point average (3.0), and co-curricular activities.

Each year, you advise Y of the amount available for scholarships. Based on the amount available for distribution, Y designates students to receive said scholarship based on financial circumstances of the recipient. All scholarships are awarded on an objective and non-discriminatory basis. No scholarship may be awarded to any disqualified person as defined in Code Section 4946.

Y sets amounts based on the amount of funds available and financial need of recipient.

Students may reapply if they continue to attend Y, demonstrate financial need and maintain a minimum grade point average of 3.0.

You pay the scholarship proceeds directly to the Y for the benefit of the recipient. You send a letter to Y on behalf of each recipient specifying that Y's acceptance of the funds constitutes that it agrees to notify you if the scholarship recipient fails to meet any term or condition of the scholarship and return any unused portions of the award to the Trust.

You represent that you will:

• The foundation awards the grant on an objective and nondiscriminatory basis.

• The IRS approves in advance the procedure for awarding the grant.

• The grant is a scholarship or fellowship subject to the provisions of Code section 117(a).

• The grant is to be used for study at an educational organization described in Code section 170(b)(1)(A)(ii).

• This determination only covers the grant program described above. This approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request.

• This determination applies only to you. It may not be cited as a precedent.

• You cannot rely on the conclusions in this letter if the facts you provided have changed substantially. You must report any significant changes to your program to the Cincinnati Office of Exempt Organizations at:

•  

  Internal Revenue Service

   

  Exempt Organizations Determinations

   

  P.O. Box 2508

   

  Cincinnati, OH 45201

   

• You cannot award grants to your creators, officers, directors, trustees, foundation managers, or members of selection committees or their relatives.

• All funds distributed to individuals must be made on a charitable basis and further the purposes of your organization. You cannot award grants for a purpose that is inconsistent with Code section 170(c)(2)(B).

• You should keep adequate records and case histories so that you can substantiate your grant distributions with the IRS if necessary.

If you have questions, please contact the person listed at the top of this letter.