C.5. Grants to Governmental Agencies Subsequently Awarded to Individuals

(1) When a private foundation makes a grant to a governmental agency described in

Section 170(c)(1) for use by an individual, the grant will not be subject to the requirements of Section 4945(d)(3) and (g) if the governmental agency satisfies the IRS in advance that its grant program:

a. Furthers a charitable purpose described in Section 170(c)(2)(B);

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b. Requires that the individual grantee submit to the governmental agency

reports which must be done in a manner that satisfies the requirements of Treas. Reg. 53.4945-4(c)(3); and

c. Requires that the governmental agency investigate jeopardized grants in a

manner substantially similar to that described in the meaning Treas. Reg. 53.4945-4(c)(4). See Treas. Reg. 53.4945-4(a)(4)(iii).

(2) If these requirements are satisfied, these grants will not be subject to Section

4945(d)(3) even if the grantor private foundation exercises considerable control over the selection of individual grantees.