§ 4966. Taxes on taxable distributions
(a)
Imposition of taxes
(1)
On the sponsoring organization
There is hereby imposed on each taxable distribution a tax equal to 20 percent of the amount thereof. The tax imposed by this paragraph shall be paid by the sponsoring organization with respect to the donor advised fund.
(2)
On the fund management
There is hereby imposed on the agreement of any fund manager to the making of a distribution, knowing that it is a taxable distribution, a tax equal to 5 percent of the amount thereof. The tax imposed by this paragraph shall be paid by any fund manager who agreed to the making of the distribution.
(b)
Special rules
For purposes of subsection (a)—
(c)
Taxable distribution
For purposes of this section—
(d)
Definitions
For purposes of this subchapter—
(1)
Sponsoring organization
The term “sponsoring organization” means any organization which—
(2)
Donor advised fund
(A)
In general
Except as provided in subparagraph (B) or (C), the term “donor advised fund” means a fund or account—
(B)
Exceptions
The term “donor advised fund” shall not include any fund or account—
(ii)
with respect to which a person described in subparagraph (A)(iii) advises as to which individuals receive grants for travel, study, or other similar purposes, if—
(I)
such person’s advisory privileges are performed exclusively by such person in the person’s capacity as a member of a committee all of the members of which are appointed by the sponsoring organization,
(II)
no combination of persons described in subparagraph (A)(iii) (or persons related to such persons) control, directly or indirectly, such committee, and
(III)
all grants from such fund or account are awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance by the board of directors of the sponsoring organization, and such procedure is designed to ensure that all such grants meet the requirements of paragraph (1), (2), or (3) of section
4945
(g).
(C)
Secretarial authority
The Secretary may exempt a fund or account not described in subparagraph (B) from treatment as a donor advised fund—
(3)
Fund manager
The term “fund manager” means, with respect to any sponsoring organization—
(4)
Disqualified supporting organization
(A)
In general
The term “disqualified supporting organization” means, with respect to any distribution—
(i)
any type III supporting organization (as defined in section
4943
(f)(5)(A)) which is not a functionally integrated type III supporting organization (as defined in section
4943
(f)(5)(B)), and
(ii)
any organization which is described in subparagraph (B) or (C) if—
(B)
Type I and type II supporting organizations
An organization is described in this subparagraph if the organization meets the requirements of subparagraphs (A) and (C) of section
509
(a)(3) and is—