D.7. Terms of Grant Agreements

(1) Compliance with the expenditure responsibility provisions of Section 4945(h) will

also require the grantor organization to make all Section 4945(d)(4) grants subject to a written commitment signed by an appropriate officer, director, or trustee of the grantee organization.

(2) The commitment must include provisions:

a. Clearly stating the purposes of the grant. Such purposes may include

contributing to capital endowment, purchase of capital equipment, specific program or series of programs, or general support of the grantee organization, provided that neither the grants nor the income thereof may be used for non-Section 170(c)(2)(B) purposes.

b. Indicating that the grantee organization must repay any funds not used for

grant purposes.

c. Indicating that the grantee organization must submit annual reports on the

use of funds (unless the grant is to a private foundation for endowment or other capital purposes (see Treas. Reg. 53.4945-5(c)(2)), and in which case

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the reports may be discontinued after three years in appropriate circumstances).

d. Indicating that complete records of receipts and expenditures must be

maintained, and to make such records available to the grantor. The grantee organization must also agree not to use funds in a manner inconsistent with the provisions of Section 4945(d)(1) through (5), including the requirement not to make any grant which does not comply with the requirements of Section 4945(d)(3) or (4). See Treas. Reg. 53.4945-5(b)(3).