THE CALDWELL FAMILY FOUNDATION
A New York Not-for-Profit Corporation
EIN: 88-3021547
Grant-Making Policy and Procedures Manual
330 Madison Avenue, Suite 2401 New York, NY 10017
Date of Incorporation: March 20, 2023 New York Department of State, Filing No. 230320-001847
IRS Determination Letter Received: July 14, 2023 Tax-Exempt under IRC § 501(c)(3) Classified as a Private Foundation under IRC § 509(a)
Adopted by the Board of Directors on September 15, 2023
Prepared by: Calderwood & Harkness LLP 375 Park Avenue, 42nd Floor New York, NY 10152 Matter No. 1034-00004
CONFIDENTIAL — This Manual is the property of The Caldwell Family Foundation and is intended solely for the use of its Board of Directors, officers, staff, and authorized advisors. Distribution to any other person or entity without the prior written consent of the Foundation is prohibited.
ARTICLE I — PURPOSE AND SCOPE
Section 1.1 — Purpose of This Manual
This Grant-Making Policy and Procedures Manual (the "Manual") establishes the policies, procedures, and standards governing all grant-making activities of The Caldwell Family Foundation (the "Foundation"). The Manual is designed to provide a comprehensive framework within which the Board of Directors (the "Board"), officers, staff, and authorized advisors of the Foundation shall evaluate, approve, administer, and monitor all grants, donations, distributions, and program-related investments made by the Foundation in furtherance of its charitable mission.
The Manual is intended to ensure that all grant-making activities of the Foundation are conducted in full compliance with the Internal Revenue Code of 1986, as amended (the "Code"), and in particular the private foundation rules set forth in Sections 4940 through 4946 of the Code, the regulations promulgated thereunder, and all applicable guidance issued by the Internal Revenue Service (the "IRS"). In addition, the Manual is intended to ensure compliance with the New York Not-for-Profit Corporation Law (NY N-PCL), the New York Prudent Management of Institutional Funds Act (NY EPTL Article 5, Title 5), and all other applicable state and federal laws, rules, and regulations governing the operations and grant-making activities of a private foundation organized and operated exclusively for charitable purposes.
The Board recognizes that disciplined and transparent grant-making procedures are essential to the effective stewardship of the Foundation's charitable assets and to the preservation of the Foundation's tax-exempt status. This Manual shall serve as the primary reference document for all persons involved in the Foundation's grant-making process and shall be interpreted and applied in a manner consistent with the Foundation's Certificate of Incorporation, Bylaws, and other governing documents.
Section 1.2 — Mission Statement of the Foundation
The Caldwell Family Foundation is dedicated to enriching the communities of the New York metropolitan area through purposeful and sustained support for the arts, education, and environmental conservation. The Foundation seeks to foster creative expression, expand access to educational opportunity, and advance the preservation and responsible stewardship of the natural environment, with a particular emphasis on programs and organizations that serve underrepresented and under-resourced communities.
The Foundation was established by Jonathan R. Caldwell and Eleanor V. Caldwell as a central component of a comprehensive estate and philanthropic plan. The Caldwells have a longstanding commitment to the cultural, educational, and environmental vitality of the New York metropolitan area, and the Foundation is intended to serve as a lasting vehicle for the realization of their philanthropic vision.
The Foundation was incorporated on March 20, 2023, as a New York not-for-profit corporation (New York Department of State, Filing No. 230320-001847). The Foundation received its IRS determination letter on July 14, 2023, recognizing the Foundation as an organization exempt from federal income tax under Section 501(c)(3) of the Code and classified as a private foundation under Section 509(a) of the Code.
The Foundation's initial funding consisted of a cash contribution of Ten Million Dollars ($10,000,000) made by Jonathan R. Caldwell and Eleanor V. Caldwell as a joint gift, with Five Million Dollars ($5,000,000) attributable to each spouse, executed on April 1, 2023. This initial contribution constitutes the Foundation's founding corpus, and the Foundation anticipates receiving additional contributions in the future to further its charitable mission.
Section 1.3 — Scope and Applicability
This Manual applies to all grants, donations, charitable distributions, and program-related investments made by the Foundation, regardless of amount, recipient, or program area. Without limiting the foregoing, this Manual covers:
(a) Grants to organizations described in Section 501(c)(3) of the Code that are classified as public charities under Section 509(a)(1), (2), or (3) of the Code;
(b) Grants to organizations that are not public charities, including private foundations, private operating foundations, Type III supporting organizations, and other organizations, which are subject to the expenditure responsibility requirements of Section 4945 of the Code and Article VII of this Manual;
(c) Grants to foreign organizations, which are subject to enhanced due diligence and expenditure responsibility procedures as set forth in Article VII;
(d) Program-related investments made by the Foundation in furtherance of its charitable purposes, as described in Section 4944(c) of the Code; and
(e) Grants to individuals for scholarships, fellowships, or similar educational purposes, as described in Section 4945(g) of the Code and Article X of this Manual.
This Manual does not govern the administrative or operational expenditures of the Foundation, including but not limited to office expenses, compensation of staff, insurance, professional fees, and investment management fees. Such expenditures are governed by the Foundation's separate Operational Policies and Procedures, which have been separately adopted by the Board.
Section 1.4 — Minimum Distribution Requirement
As a private foundation, the Foundation is subject to the minimum distribution requirements of Section 4942 of the Code. Under Section 4942, the Foundation is required to distribute annually, as qualifying distributions, an amount equal to at least five percent (5%) of the fair market value of the Foundation's net investment assets (the "distributable amount"), as determined for the preceding taxable year.
Based on the Foundation's initial corpus of Ten Million Dollars ($10,000,000), the Foundation's Year 1 minimum distribution target is Five Hundred Thousand Dollars ($500,000), representing five percent (5%) of the initial fair market value of the Foundation's net investment assets.
For purposes of Section 4942, qualifying distributions include:
(a) Grants to organizations and individuals made in furtherance of the Foundation's charitable purposes;
(b) Program-related investments, as defined in Section 4944(c) of the Code;
(c) Amounts paid to acquire assets used (or held for use) directly in carrying out the Foundation's exempt purposes; and
(d) Reasonable and necessary administrative expenses that are directly related to the Foundation's grant-making and charitable activities (including, but not limited to, due diligence costs, site visit expenses, and the costs of preparing and administering Grant Agreements).
The Board shall ensure that the Foundation's grant-making activity, combined with other qualifying distributions, meets or exceeds the annual minimum distribution requirement each taxable year. The Treasurer, in consultation with Strathmore Corporation & Greaves LLP (Martin J. Prescott, CPA), shall monitor the Foundation's distributable amount on an ongoing basis and shall report to the Board at each regular quarterly meeting regarding the Foundation's progress toward meeting the minimum distribution requirement for the current taxable year. If at any point the Board determines that the Foundation's anticipated qualifying distributions may fall short of the annual minimum distribution requirement, the Board shall take prompt action to authorize additional grants or other qualifying distributions in a timely manner.
The Board acknowledges that the penalty for failure to make the required minimum distribution is an initial excise tax of thirty percent (30%) of the undistributed amount under Section 4942(a) of the Code, with an additional tax of one hundred percent (100%) under Section 4942(b) if the deficiency is not corrected within the applicable correction period. Accordingly, compliance with the minimum distribution requirement is a matter of the highest priority.
ARTICLE II — BOARD GOVERNANCE AND AUTHORITY
Section 2.1 — Board of Directors
The Foundation is governed by its Board of Directors, which has ultimate fiduciary responsibility for all activities of the Foundation, including all grant-making decisions. As of the date of adoption of this Manual, the Board of Directors is composed of the following individuals:
All grant-making decisions are the ultimate responsibility of the Board. No grant shall be committed, authorized, or disbursed except in accordance with the procedures set forth in this Manual. The Board may delegate certain preliminary functions — including application review, due diligence, and recommendation — to the Grant-Making Committee or to authorized staff or consultants, but the final authority to approve or deny grants remains with the Board, except as expressly provided in Section 2.2 below with respect to grants of Twenty-Five Thousand Dollars ($25,000) or less.
The Board is committed to ensuring that its grant-making decisions are informed, thoughtful, and consistent with the Foundation's mission, strategic priorities, and legal obligations. Each director shall exercise the care, diligence, and prudence that a reasonably prudent person would exercise in a like position and under similar circumstances, in accordance with NY N-PCL § 717 and the Foundation's fiduciary obligations under applicable law.
Section 2.2 — Grant-Making Authority
The Board retains exclusive authority to approve or deny all grants in amounts exceeding Twenty-Five Thousand Dollars ($25,000). No single director, officer, committee member, or staff person may unilaterally commit Foundation funds to any grant exceeding Twenty-Five Thousand Dollars ($25,000) without the prior approval of the Board at a duly convened meeting.
The President of the Foundation (currently Jonathan R. Caldwell) or, in the President's absence, the Vice President (currently Eleanor V. Caldwell), is authorized to approve individual grants of Twenty-Five Thousand Dollars ($25,000) or less, provided that:
(a) The grant is consistent with the Foundation's mission and the program areas described in Article III;
(b) The due diligence procedures described in Article V have been completed, or the President or Vice President has determined in good faith that a reasonable and appropriate level of due diligence has been conducted for the size and nature of the grant;
(c) The grant does not constitute a taxable expenditure under Section 4945 of the Code or an act of self-dealing under Section 4941 of the Code;
(d) The grant is documented by a written Grant Agreement in accordance with Section 6.2; and
(e) The grant is reported to the full Board and ratified at the next regular Board meeting.
The authority of the President or Vice President to approve grants of Twenty-Five Thousand Dollars ($25,000) or less is intended to allow the Foundation to respond promptly to time-sensitive funding opportunities without the need for a special Board meeting. This authority shall be exercised sparingly and with due regard for the Foundation's resources, policies, and fiduciary obligations.
Section 2.3 — Grant-Making Committee
The Board may appoint a Grant-Making Committee (the "Committee") consisting of not fewer than three (3) directors to review grant applications, conduct preliminary due diligence, evaluate proposals, and make recommendations to the full Board regarding the approval or denial of grants. The Committee shall operate in accordance with a charge established by the Board and in conformity with the Foundation's Bylaws and this Manual.
The initial Grant-Making Committee shall consist of:
• Eleanor V. Caldwell, Chair
• Olivia G. Caldwell, Member
• Dr. Margaret P. Elsworth, Member
The Committee shall meet as frequently as necessary to review pending applications and shall present its recommendations to the full Board for final approval at regular or special meetings of the Board. The Committee's recommendations shall be in writing and shall include, for each proposed grant, a summary of the applicant's request, the Committee's assessment of the proposal's merits and alignment with the Foundation's mission, the results of due diligence, and any recommended conditions or modifications to the grant terms.
The Committee's recommendations are advisory only; the full Board retains the authority to approve, deny, or modify any recommended grant. The Committee may also recommend that the Board request additional information from an applicant, defer consideration of a proposal to a future meeting, or invite an applicant to make a presentation to the Board.
Section 2.4 — Conflict of Interest and Self-Dealing
The Foundation has separately adopted a Conflict of Interest Policy, which is incorporated herein by reference and applies to all directors, officers, staff, and advisors of the Foundation. All persons subject to the Conflict of Interest Policy shall comply with its terms in connection with all grant-making activities.
All directors of the Foundation are "disqualified persons" as defined in Section 4946 of the Code. The term "disqualified person" includes substantial contributors to the Foundation, foundation managers (i.e., officers and directors), owners of more than twenty percent (20%) of certain entities that are substantial contributors, and members of the families of any of the foregoing. As of the date of this Manual, the following individuals are disqualified persons with respect to the Foundation:
• Jonathan R. Caldwell
• Eleanor V. Caldwell
• Thomas R. Caldwell
• Katherine C. Hartfield
• Olivia G. Caldwell
• Dr. Sarah P. Caldwell (spouse of Thomas R. Caldwell)
• Dr. Andrew W. Hartfield (spouse of Katherine C. Hartfield)
• All lineal descendants and ancestors of the foregoing, and their respective spouses
In addition, certain entities owned or controlled by the foregoing individuals are disqualified persons, including Caldwell Ridgeline Capital LLC, Stonecrest Realty Holdings LLC, Meridian Crest Partners LLC, and Havensbrook Wealth Advisors LLC.
No grant shall be made that directly or indirectly benefits a disqualified person or that constitutes an act of self-dealing under Section 4941 of the Code. The prohibitions on self-dealing are absolute and apply regardless of the fairness of the transaction or the benefit to the Foundation. Acts of self-dealing include, without limitation, the sale, exchange, or leasing of property between the Foundation and a disqualified person; the lending of money or extension of credit between the Foundation and a disqualified person; the furnishing of goods, services, or facilities between the Foundation and a disqualified person (except for certain incidental benefits); the payment of compensation or reimbursement of expenses by the Foundation to a disqualified person (except for reasonable and necessary compensation for personal services); and the transfer of Foundation assets to, or for the use or benefit of, a disqualified person.
Any director who has an actual or apparent conflict of interest with respect to a proposed grant must promptly and fully disclose the nature and extent of the conflict to the Board. The director must recuse himself or herself from all deliberation and voting on the proposed grant. The recusal shall be recorded in the minutes of the Board meeting. If the Board determines that a proposed grant would constitute an act of self-dealing or would otherwise impermissibly benefit a disqualified person, the grant shall not be made.
No compensation is paid to family-member directors for their service on the Board. Dr. Margaret P. Elsworth, as the sole independent director, may receive reasonable compensation for her service, as approved by the Board in accordance with the Foundation's compensation policies and applicable law.
Section 2.5 — Role of Outside Advisors
The Foundation recognizes the importance of obtaining qualified legal, tax, and financial advice in connection with its grant-making activities. The Foundation has engaged the following outside advisors:
Legal Counsel: Calderwood & Harkness LLP, 375 Park Avenue, 42nd Floor, New York, NY 10152 (Primary Contact: Sylvia Hartwell, Specialist Partner, Tax-Exempt Organizations)
Tax Advisors: Strathmore Corporation & Greaves LLP (Primary Contact: Martin J. Prescott, CPA)
Financial Advisor: Havensbrook Wealth Advisors LLC (Primary Contact: Diana R. Linden, CFP®)
The Board and the Grant-Making Committee may consult with the foregoing advisors regarding the legal, tax, financial, and regulatory aspects of any proposed grant or grant-making activity. The Foundation encourages its directors and staff to seek professional guidance whenever questions arise concerning the Foundation's obligations under the Code, the NY N-PCL, or this Manual.
Review by outside counsel (Calderwood & Harkness LLP) is required for:
(a) All grants subject to expenditure responsibility under Section 4945 of the Code and Article VII of this Manual;
(b) Any grant in an amount exceeding One Hundred Thousand Dollars ($100,000);
(c) Any program-related investment;
(d) Any grant to a foreign organization;
(e) Any proposed grant that raises questions concerning self-dealing, taxable expenditures, or other potential violations of the Code; and
(f) Any other matter referred by the Board or the Grant-Making Committee.
The cost of outside advisor services directly related to grant-making activities constitutes a qualifying distribution for purposes of Section 4942 of the Code.
ARTICLE III — PROGRAM AREAS AND GRANT-MAKING PRIORITIES
Section 3.1 — Focus Areas
The Foundation concentrates its grant-making in three primary program areas, each of which reflects the philanthropic interests and values of the Caldwell family and the Foundation's charitable mission. The Board recognizes that these program areas may evolve over time and reserves the right to refine, expand, or modify the Foundation's focus areas as circumstances warrant, subject to the Foundation's Certificate of Incorporation and applicable law. As of the date of adoption of this Manual, the Foundation's primary program areas are as follows:
Arts. The Foundation supports the visual arts, performing arts, museums, galleries, and cultural institutions in the New York metropolitan area. Within this program area, the Foundation seeks to fund organizations and programs that expand public access to artistic experiences, nurture emerging artists, preserve and celebrate the cultural heritage of the region, and promote arts education for children and young adults. The Foundation is particularly interested in supporting arts organizations that serve underrepresented communities and that demonstrate innovative approaches to audience engagement, community participation, and artistic excellence.
Education. The Foundation supports scholarships, fellowships, educational institutions, literacy programs, and STEM (Science, Technology, Engineering, and Mathematics) education initiatives. Within this program area, the Foundation gives priority to organizations serving underrepresented communities in the New York metropolitan area, including programs that address educational inequity, provide mentorship and career readiness, and expand access to higher education and vocational training. The Foundation may also support educational research, curriculum development, teacher training, and innovative educational models that demonstrate measurable impact.
Environmental Conservation. The Foundation supports land conservation, urban sustainability, environmental education, clean water and air initiatives, and climate resilience programs. Within this program area, the Foundation emphasizes projects and organizations that operate in or benefit the New York metropolitan area, including urban green space preservation, waterway restoration, environmental justice, sustainable infrastructure, and community-based environmental stewardship. The Foundation may also consider supporting regional or national environmental organizations whose work has a direct and demonstrable impact on the New York metropolitan area.
Section 3.2 — Geographic Focus
The Foundation's primary geographic focus is the New York metropolitan area, which, for purposes of this Manual, includes:
• The five boroughs of New York City (Manhattan, Brooklyn, Queens, The Bronx, and Staten Island);
• Long Island (Nassau and Suffolk Counties);
• Westchester County and Rockland County, New York;
• The greater tri-state region, including portions of northern New Jersey and southwestern Connecticut that form part of the New York metropolitan statistical area.
The Board recognizes that certain programs and organizations with a broader geographic reach may nonetheless have a significant and demonstrable impact on the New York metropolitan area. Accordingly, grants to organizations based outside the primary geographic area may be considered on an exceptional basis if the proposed program or project is clearly aligned with the Foundation's mission and will produce meaningful benefits within the primary geographic area. Any grant proposed for an organization or project outside the primary geographic area shall be flagged for discussion by the Grant-Making Committee and presented to the full Board with a written explanation of the basis for the exception.
Section 3.3 — Types of Support
The Foundation may provide the following types of grant support:
General Operating Support. Unrestricted grants to support the overall operations and mission of a qualified recipient organization. General operating support grants are intended for organizations with strong track records, sound governance, and missions closely aligned with the Foundation's program areas.
Project-Specific Grants. Grants designated for a specific program, project, or initiative described in the grantee's application. Project-specific grants include detailed budgets and reporting requirements tied to the funded activity.
Capital Grants. Grants for building construction, renovation, equipment acquisition, or other capital purposes that further the grantee's charitable mission. Capital grants may be subject to additional conditions regarding the use, maintenance, and disposition of the funded asset.
Program-Related Investments (PRIs). Investments made by the Foundation in which the primary purpose is to accomplish one or more of the Foundation's charitable purposes, and no significant purpose is the production of income or the appreciation of property. Program-related investments are subject to separate PRI policies and must comply with the requirements of Section 4944(c) of the Code. All proposed PRIs shall be reviewed by Calderwood & Harkness LLP prior to Board approval.
Matching Grants and Challenge Grants. Grants conditioned upon the grantee's ability to raise a specified amount of matching funds from other sources within a defined time period. Matching and challenge grants are designed to leverage the Foundation's investment and to encourage broad-based support for the grantee's work.
Multi-Year Commitments. Grants that extend over a period of more than one year, payable in annual or other periodic installments. Multi-year grants are subject to annual review by the Board and annual reauthorization of each subsequent installment. Continuation of funding in any year is contingent upon the grantee's satisfactory performance and compliance with reporting requirements as set forth in Article VIII.
Section 3.4 — Exclusions
The Foundation will not make grants for the following purposes or to the following types of recipients:
(a) Political Campaigns or Lobbying Activities. The Foundation will not fund any activity that constitutes participation or intervention in a political campaign on behalf of (or in opposition to) any candidate for public office, or any attempt to influence legislation, within the meaning of Sections 4945(d)(1) and 4945(d)(2) of the Code. This prohibition includes direct lobbying, grassroots lobbying, and electioneering communications.
(b) Grants to Individuals. The Foundation will not make grants directly to individuals except for scholarships, fellowships, or similar educational grants made pursuant to procedures approved in advance by the IRS under Section 4945(g) of the Code, as described in Article X of this Manual.
(c) Taxable Expenditures. The Foundation will not make any expenditure that would constitute a "taxable expenditure" under Section 4945 of the Code, as further described in Article XI.
(d) Discriminatory Organizations. The Foundation will not make grants to organizations that discriminate on the basis of race, religion, color, gender, sexual orientation, gender identity, national origin, age, or disability in the provision of their programs, services, or employment practices.
(e) Jeopardizing Activities. The Foundation will not make any grant or expenditure for a purpose that would jeopardize the Foundation's tax-exempt status under Section 501(c)(3) of the Code or its classification as a private foundation under Section 509(a) of the Code.
The Board may, from time to time, identify additional categories of exclusion as it deems appropriate, consistent with the Foundation's mission and legal obligations.
ARTICLE IV — GRANT APPLICATION PROCEDURES
Section 4.1 — Solicitation of Applications
The Foundation may accept unsolicited grant applications from organizations whose missions and programs are consistent with the Foundation's charitable purposes and program areas. In addition, the Foundation may proactively identify and solicit proposals from organizations whose work is particularly well aligned with the Foundation's strategic priorities. Proactive solicitation does not guarantee funding, and all solicited proposals are subject to the same application, due diligence, and approval procedures as unsolicited proposals.
Applications may be accepted on a rolling basis throughout the year. The Board will review grant applications at its regular quarterly meetings, which are typically held in January, April, July, and October of each year, or at such other times as the Board may determine. Applications received between quarterly meetings will be compiled and presented to the Grant-Making Committee for preliminary review in advance of the next scheduled Board meeting.
At the discretion of the Grant-Making Committee, a "Letter of Inquiry" (LOI) process may be used as a preliminary screening step before inviting an applicant to submit a full proposal. The LOI process is intended to conserve the resources of both the Foundation and prospective applicants by allowing the Committee to assess, at an early stage, whether a proposed project falls within the Foundation's program areas and strategic priorities. The LOI format and requirements are established by the Committee and may be modified from time to time. Submission of an LOI does not create any obligation on the part of the Foundation to review a full proposal or to make a grant.
Section 4.2 — Application Requirements
Every applicant seeking a grant from the Foundation must submit a complete grant application package. The following materials are required for all applications:
1. Grant Application Form. A completed Grant Application Form in the form attached as Appendix A, or such updated form as may be adopted by the Grant-Making Committee from time to time.
2. Narrative Description. A narrative description of the proposed project or program, including the specific objectives, activities, timeline, target population, and anticipated outcomes. The narrative should demonstrate how the proposed project or program aligns with the Foundation's mission and program areas.
3. Detailed Budget. A detailed line-item budget for the proposed use of grant funds, including all sources of anticipated revenue and all projected expenditures for the project or program. If the applicant is requesting only partial funding, the budget should identify all other confirmed and pending sources of support.
4. Organizational Background. A description of the applicant organization's history, mission, governance, and key programs, including the organization's track record of accomplishment and impact in the relevant program area.
5. Evidence of Tax-Exempt Status. A copy of the applicant's IRS determination letter confirming the organization's tax-exempt status under Section 501(c)(3) of the Code, or, for organizations that are not described in Section 501(c)(3), a detailed description of the organization's legal classification and structure. For organizations classified as public charities, the applicant should identify the applicable subsection of Section 509(a) under which the organization qualifies.
6. Financial Statements. The applicant's most recent audited financial statements, prepared in accordance with generally accepted accounting principles (GAAP). If audited financial statements are not available, the applicant may submit unaudited financial statements reviewed by an independent accountant, accompanied by an explanation of why audited statements are not available.
7. Board of Directors and Key Staff. A current list of the applicant's board of directors and key staff, including names, titles, and relevant affiliations.
8. IRS Form 990 or Form 990-PF. The applicant's most recently filed IRS Form 990, Form 990-EZ, or Form 990-PF, as applicable.
9. Additional Information. Any additional information, documents, or materials requested by the Grant-Making Committee, including but not limited to letters of support, evaluation reports, strategic plans, and references.
Incomplete applications will not be considered until all required materials have been received. The Grant-Making Committee may waive specific application requirements for small grants (Twenty-Five Thousand Dollars ($25,000) or less) at its discretion, provided that the Committee is satisfied that sufficient information is available to conduct an appropriate level of due diligence.
Section 4.3 — Application Review Timeline
The Foundation endeavors to review and act upon grant applications in a timely and efficient manner, consistent with its fiduciary obligations and the need for thorough due diligence. The following timeline applies to the application review process:
Letter of Inquiry (LOI) Review. If an LOI process is used, the Grant-Making Committee will review each LOI within thirty (30) days of receipt. The applicant will be notified in writing within that period as to whether the Foundation invites the submission of a full proposal. An invitation to submit a full proposal does not constitute a commitment to fund the proposed project.
Full Proposal Review. Upon receipt of a complete grant application, the Grant-Making Committee will review the application within sixty (60) days. During this period, the Committee or its designees will conduct due diligence in accordance with Article V, request any additional information as needed, and prepare a written recommendation for the full Board.
Board Decision. The Grant-Making Committee's recommendation will be presented to the full Board at the next regular quarterly Board meeting following the completion of the Committee's review. The Board will discuss the recommendation and vote on the proposed grant in accordance with Section 6.1 of this Manual.
Applicant Notification. The Foundation will notify the applicant in writing of the Board's decision within fifteen (15) business days following the Board meeting at which the decision is made.
The foregoing timeline is intended as a guideline. The Foundation reserves the right to extend the review period in the case of complex proposals, proposals requiring enhanced due diligence, or circumstances beyond the Foundation's control. Applicants will be notified if a material delay is anticipated.
ARTICLE V — DUE DILIGENCE PROCEDURES
Section 5.1 — Due Diligence Checklist
For every proposed grant, the Grant-Making Committee (or such staff or consultants as the Committee may designate) shall complete the following due diligence steps prior to presenting a recommendation to the Board. A completed Due Diligence Checklist, in the form attached as Appendix B, shall be included in the Grant File for each proposed grant.
1. Tax-Exempt Status Verification. Confirm the applicant's tax-exempt status under Section 501(c)(3) of the Code by consulting the IRS Tax Exempt Organization Search database (or any successor database maintained by the IRS). Obtain and review a copy of the applicant's IRS determination letter. If the applicant's tax-exempt status cannot be verified, the proposed grant shall not proceed until the applicant's status is satisfactorily established, or the grant shall be structured as an expenditure responsibility grant under Article VII.
2. Public Charity vs. Private Foundation Classification. Determine whether the applicant is classified as a public charity under Section 509(a)(1), (2), or (3) of the Code, or as a private foundation or private operating foundation. This determination is critical because grants to organizations that are not public charities require the exercise of expenditure responsibility under Section 4945 of the Code and Article VII of this Manual. The Committee shall review the applicant's Form 990 or other documentation to confirm the applicant's classification and shall note the classification in the Due Diligence Checklist.
3. Financial Review. Review the applicant's most recent audited or reviewed financial statements and IRS Form 990 or Form 990-PF. Assess the applicant's financial stability, including total revenue, revenue diversification, operating reserves, debt levels, and the ratio of administrative and fundraising expenses to program expenses (overhead ratio). The Committee shall consider whether the applicant has the financial capacity to administer the proposed grant effectively and to sustain the funded program beyond the grant period.
4. Organizational Review. Review the applicant's organizational documents, including its certificate of incorporation (or equivalent charter document), bylaws, and any amendments thereto. Assess the applicant's board composition, governance practices, and organizational capacity. Consider whether the applicant has adequate internal controls, financial management procedures, and compliance systems to ensure proper stewardship of grant funds.
5. Program Review. Evaluate the proposed program or project's alignment with the Foundation's mission and the program areas described in Article III. Assess the feasibility of the proposed activities, the quality and specificity of the proposed budget, the reasonableness of the proposed timeline, the clarity and measurability of the proposed outcomes and evaluation metrics, and the applicant's track record of accomplishment in the relevant program area. Consider whether the proposed program addresses a significant need and whether the applicant's approach is likely to achieve meaningful impact.
6. Disqualified Person Check. Confirm that no disqualified person (as defined in Section 4946 of the Code) has a financial interest in the applicant organization or will personally benefit from the proposed grant. Cross-reference the applicant's board of directors, key staff, and principal donors against the Foundation's list of disqualified persons, including Jonathan R. Caldwell, Eleanor V. Caldwell, Thomas R. Caldwell, Katherine C. Hartfield, Olivia G. Caldwell, Dr. Sarah P. Caldwell, Dr. Andrew W. Hartfield, and their respective family members, as well as related entities including Caldwell Ridgeline Capital LLC, Stonecrest Realty Holdings LLC, Meridian Crest Partners LLC, and Havensbrook Wealth Advisors LLC. If any potential connection is identified, the matter shall be referred to Calderwood & Harkness LLP for review and advice before the grant is presented to the Board.
7. Legal and Regulatory Review. Confirm that the applicant is not subject to any pending litigation, regulatory actions, enforcement proceedings, or compliance issues that would create legal, financial, or reputational risk for the Foundation. Review available public records, media reports, and any other relevant information. If concerns are identified, consult with Calderwood & Harkness LLP prior to proceeding.
8. Site Visit (if warranted). For grants exceeding Fifty Thousand Dollars ($50,000), the Committee shall conduct or arrange a site visit to the applicant's offices or program location, or arrange a virtual meeting with the applicant's leadership and key staff. The purpose of the site visit is to verify the information provided in the application, assess the applicant's operational capacity, and gain a firsthand understanding of the proposed program or project. Site visit notes shall be included in the Grant File.
9. Reference Check. Contact at least one reference or peer organization familiar with the applicant's work, programs, or leadership. References may include other funders, community partners, beneficiaries, or professional associations. Reference check notes shall be included in the Grant File.
The Grant-Making Committee shall document the results of each due diligence step in the Due Diligence Checklist and shall note any areas of concern or risk. If any significant concerns are identified during the due diligence process, the Committee shall determine whether additional investigation is warranted, whether conditions should be imposed on the proposed grant, or whether the application should be declined.
Section 5.2 — Enhanced Due Diligence for Non-Public Charities
If the proposed grantee is not a public charity described in Section 509(a)(1), (2), or (3) of the Code — that is, if the proposed grantee is a private foundation, a private operating foundation, a Type III supporting organization (whether functionally integrated or non-functionally integrated), a foreign organization, or a non-exempt entity — enhanced due diligence is required. Enhanced due diligence includes, in addition to all of the steps described in Section 5.1 above, the full expenditure responsibility procedures set forth in Article VII of this Manual.
Enhanced due diligence may also be warranted in other circumstances at the discretion of the Grant-Making Committee, including but not limited to grants to newly formed organizations, grants to organizations with limited track records, grants involving complex program structures, and grants to organizations that have experienced recent leadership transitions or financial difficulties.
The Committee shall consult with Calderwood & Harkness LLP before presenting to the Board any grant recommendation involving a non-public charity or any other grant requiring enhanced due diligence.
Section 5.3 — Due Diligence Documentation
All due diligence materials collected in connection with a proposed grant shall be compiled in the Grant File maintained by the Secretary (Thomas R. Caldwell). The Grant File shall be maintained in a secure location (physical or electronic) and shall be retained for a minimum of seven (7) years after the final grant report is received by the Foundation, or for such longer period as may be required by Section 9.2 of this Manual or applicable law.
The Due Diligence Checklist form is provided in Appendix B. The checklist must be completed and signed by the Grant-Making Committee Chair (currently Eleanor V. Caldwell) before the Committee's recommendation is presented to the Board.
ARTICLE VI — GRANT APPROVAL AND DOCUMENTATION
Section 6.1 — Board Approval Process
Following the completion of due diligence and the Grant-Making Committee's review, the Committee shall present its recommendation for each proposed grant to the full Board of Directors at a regular or special meeting of the Board. The Committee's written recommendation shall include the following information:
(a) The name, address, and EIN of the applicant organization;
(b) The amount of the grant requested and the amount recommended by the Committee;
(c) A description of the proposed program or project, including objectives, activities, and timeline;
(d) An assessment of the proposal's alignment with the Foundation's mission and program areas;
(e) A summary of the due diligence findings, including any areas of concern or risk;
(f) The Committee's recommended grant terms and conditions, including payment schedule, reporting requirements, and any special conditions;
(g) Whether the proposed grant is subject to expenditure responsibility under Article VII; and
(h) Any other information the Committee deems relevant to the Board's consideration.
The Board shall discuss the Committee's recommendation and shall vote on the proposed grant. Approval of a grant requires the affirmative vote of a majority of the directors present at a duly convened meeting of the Board at which a quorum is present. A quorum consists of a majority of the directors then in office. In the event of a tie vote, the proposed grant shall be deemed denied.
Any director who has an actual or apparent conflict of interest with respect to a proposed grant, as determined under the Foundation's Conflict of Interest Policy and Section 2.4 of this Manual, must disclose the conflict to the Board, recuse himself or herself from all deliberation and discussion regarding the proposed grant, and abstain from voting. The director's disclosure, recusal, and abstention shall be recorded in the minutes of the Board meeting. The recused director shall not be counted for purposes of determining the quorum or the number of votes required for approval with respect to the affected grant.
The Board may approve the grant as recommended by the Committee, approve the grant with modifications (including a reduction in the grant amount or the imposition of additional conditions), defer action pending receipt of additional information, or deny the grant. The Board's decision shall be recorded in the minutes of the meeting.
Section 6.2 — Grant Agreement
Every grant approved by the Board (or approved by the President or Vice President pursuant to Section 2.2 for grants of Twenty-Five Thousand Dollars ($25,000) or less) must be documented by a written Grant Agreement executed by both the Foundation and the grantee prior to the disbursement of any grant funds. No funds shall be disbursed to a grantee until a fully executed Grant Agreement has been received by the Foundation.
The Grant Agreement template is provided in Appendix C. Each Grant Agreement shall include the following provisions:
(a) Parties. The names, addresses, and EINs of the Foundation (as Grantor) and the grantee (as Grantee).
(b) Grant Amount and Payment Schedule. The total amount of the grant and the schedule of payments, whether in a lump sum or in installments. For multi-year grants, the Agreement shall specify the amount and timing of each annual installment and the conditions for continuation of funding.
(c) Purpose and Permitted Use of Funds. A clear and specific description of the purpose for which the grant is made and the permitted uses of the grant funds. The grantee shall agree that the funds will be used solely for the stated purpose and that any material change in the use of funds requires the prior written consent of the Foundation.
(d) Reporting Requirements. The grantee's obligation to submit interim and final reports in accordance with Article VIII of this Manual, including the content, format, and due dates for each report.
(e) Return of Unexpended Funds. A provision requiring the grantee to return to the Foundation any grant funds that have not been expended for the stated purpose by the end of the grant period, unless the Foundation has approved an extension or a revised budget in writing.
(f) Books and Records Inspection. The Foundation's right to inspect, copy, and audit the grantee's books, records, and accounts relating to the use of grant funds, at any time and upon reasonable notice.
(g) Representations and Warranties. Representations by the grantee regarding its tax-exempt status under Section 501(c)(3) of the Code (or, if applicable, its status as a non-public charity or other entity), its compliance with applicable laws and regulations, and the accuracy of the information provided in its grant application.
(h) Prohibited Uses. An agreement by the grantee that grant funds will not be used, directly or indirectly, for lobbying, political campaign activity, voter registration drives (except as permitted under Section 4945(f) of the Code), or any other purpose that would constitute a taxable expenditure under Section 4945 of the Code.
(i) Expenditure Responsibility Provisions. If the grant is subject to expenditure responsibility under Article VII, the Grant Agreement shall include the additional provisions required by Section 7.3 of this Manual, or shall be accompanied by a supplemental expenditure responsibility rider.
(j) Term and Termination. The term of the grant and the circumstances under which the Foundation may terminate the grant, including termination for cause (e.g., misuse of funds, failure to submit required reports, loss of tax-exempt status) and termination for convenience (upon reasonable notice and subject to return of unexpended funds).
(k) Indemnification. The grantee's obligation to indemnify and hold harmless the Foundation and its directors, officers, and agents from and against any claims, damages, losses, or liabilities arising out of the grantee's use of grant funds or breach of the Grant Agreement.
(l) Governing Law. The Grant Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.
(m) Entire Agreement and Amendment. The Grant Agreement shall constitute the entire agreement between the parties with respect to the subject matter thereof and may not be amended or modified except by a written instrument signed by both parties.
(n) Signature blocks. Signature blocks for the Foundation (to be executed by the President, Jonathan R. Caldwell, or another authorized officer) and for the grantee (to be executed by an authorized representative of the grantee).
(o) Exhibit: Approved Budget. The approved budget for the grant, attached as an exhibit to the Grant Agreement.
Section 6.3 — Grant Payment Procedures
Upon execution of the Grant Agreement by both parties, the Treasurer (Katherine C. Hartfield) shall authorize the disbursement of grant funds in accordance with the payment schedule set forth in the Grant Agreement. All payments shall be processed through the Foundation's designated bank account (EIN 88-3021547) by check or wire transfer payable to the grantee organization. No payments shall be made to individuals, to accounts not in the name of the grantee organization, or in cash.
For multi-year grants, each annual installment is contingent upon the Foundation's satisfactory receipt and review of required interim reports and the grantee's continued compliance with the terms and conditions of the Grant Agreement. The Grant-Making Committee shall review each interim report and recommend to the Treasurer whether the next installment should be authorized, withheld pending further information, or terminated. The Board shall be informed of all installment approvals and any issues arising from interim reports at its regular quarterly meetings.
The Treasurer shall maintain accurate and complete records of all grant payments, including the date, amount, payee, and method of payment. Payment records shall be included in the Grant File and shall be available for review by the Board, outside advisors, and the IRS as required.
Section 6.4 — Declination Procedures
Applicants whose grant applications are not approved by the Board shall receive a written notification of the declination within fifteen (15) business days of the Board meeting at which the decision was made. Declination notifications shall be courteous and professional. The Foundation may, but is not required to, state the reasons for the declination. In general, the Foundation prefers not to provide detailed reasons for declination, in order to avoid the appearance of making subjective judgments about an applicant's mission or operations.