D.1. Grants Defined

(1) The term "grants" is broadly defined for the purposes of Section 4945. Section

4945(d)(4) grants include payments to other exempt and nonexempt organizations for use in carrying out either the grantor’s or grantee’s exempt purposes. Grants may be for capital endowment, for the purchase of capital equipment, or for the general support of the grantee organization’s activities. Grants may include loans for Section 170(c)(2)(B) purposes and "program-related investments," such as investments in small businesses that assist in neighborhood renovation. See Treas. Reg. 53.4945-4(a)(2).

(2) Conversely, Section 4945(d)(4) grants do not include payments for consultant

and personal services in assisting an exempt organization in planning, evaluating, or developing program activities. See Treas. Reg. 53.4945-4(a)(2).