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employee of a substantial contributor or

specific recipients of grants or assistance,

Excess benefit transactions reported

35% controlled entity of a substantial

or (2) with respect to programs of the

in Schedule L, Part I.

contributor, then enter the term

organization intended primarily to benefit

Loans reported (or not required to be

“substantial contributor” or “related to

employees (or their children) of the

reported) in Schedule L, Part II.

substantial contributor” (as the case may

substantial contributor or their 35%

Business transactions that do not

be) instead of the interested person's

controlled entities.

contain any gift element and that are

name, in order to protect the

engaged in to serve the direct and

Example. A substantial contributor to

confidentiality of the substantial

immediate needs of the organization, such

the organization states that he would like

contributor.

as payment of compensation (including

Mr. X and Ms. Y to be beneficiaries of a

taxable and nontaxable fringe benefits

grant. The organization inquires of the

Column (b). Describe the relationship

treated as compensation) to an employee

substantial contributor whether Mr. X or

between the interested person that

or independent contractor in exchange

Ms. Y are interested persons with respect

benefitted from the grant or assistance

for services of comparable value. Some

to the organization because of a family or

and the organization, such as “spouse of

business transactions may be reportable

business relationship they have with the

Director John Smith.” If “substantial

on Schedule L, Part IV.

substantial contributor (using the pertinent

contributor” was entered in column (a),

Compensation to a person listed in

instructions and definitions), and the

enter “substantial contributor” here as well.

Form 990, Part VII, Section A (including

substantial contributor replies in writing

If “related to substantial contributor” was

taxable and nontaxable fringe benefits

that they are not. Whether they actually

entered in column (a), then describe the

treated as compensation).

are interested persons or not, the

relationship without referring to specific

Grants to employees (and their

organization has made a reasonable effort

names, for example: “child of employee of

children) of a substantial contributor or

in this situation.

35% controlled entity of substantial

35% controlled entity of a substantial

contributor.”

Schools. Colleges, universities, and

contributor, awarded on an objective and

If an interested person has interested

primary and secondary schools are not

nondiscriminatory basis based on

person status other than by being a

required to identify interested persons to

pre-established criteria and reviewed by a

substantial contributor or related to a

whom they provided scholarships,

selection committee, as described in

substantial contributor, then make no

fellowships, and similar financial

Regulations section 53.4945-4(b).

reference to the substantial contributor

assistance. Instead, these organizations

Grants or assistance provided to an

status. For example, if grantee Jane Smith

must, in Part III, group each type of

interested person as a member of the

is both a substantial contributor and the

financial assistance (for example,

charitable class or other class (such as a

spouse of Director John Smith, then she

need-based scholarships, merit

member of a section 501(c)(5), 501(c)(6),

must be listed by name in column (a), and

scholarships, discounted tuition) provided

or 501(c)(7) organization) that the

column (b) must state “spouse of Director

to interested persons in separate lines.

organization intends to benefit in

John Smith” or words to similar effect.

For each line, the school should report in

furtherance of its exempt purpose, if

column (c) the aggregate dollar amount of

provided on similar terms as provided to

Column (c). Enter the total dollar amount

each type of assistance, the type of

of grants and other assistance provided to

other members of the class, such as

assistance in column (d), and the purpose

the interested person during the

short-term disaster relief, poverty relief, or

of the assistance in column (e), unless

organization's tax year.

trauma counseling. However, grants for

such reporting would be an unauthorized

travel, study (such as scholarships or

Column (d). Describe the type of

disclosure of student education records

fellowships), or other similar purposes

assistance provided to the interested

under the Family Educational Rights and

(such as to achieve a specific objective,

person.

Privacy Act (FERPA). Columns (a) and (b)

produce a report or other similar product,

should be left blank for these lines.

Column (e). Describe the organization's

or improve or enhance a literary, artistic,

purpose in providing assistance to the

musical, scientific, teaching, or other

Part IV. Business

interested person.

similar capacity, skill, or talent of the

Transactions Involving

grantee) like those described in section

Reasonable effort. The organization is

4945(d)(3) are not excluded from

Interested Persons

not required to provide information about a

reporting under this exception.

grant or assistance to an interested

Report in Part IV business transactions for

But see Schools, later, for instructions on

person if it is unable to secure the

which payments were made during the

how to report grants, scholarships, and

information regarding interested person

organization's tax year between the

other assistance from colleges,

status after making a reasonable effort to

organization and an interested person, if

universities, primary, and secondary

obtain it. An example of a reasonable

such payments exceeded the reporting

schools. Grants that are awards

effort for Part III is for the organization to

thresholds described below, and

recognizing past achievements also are

distribute a questionnaire annually to each

regardless of when the transaction was

not excluded from reporting under this

current or former officer, director,

entered into by the parties. The “ordinary

exception. Grants for travel, study, or

trustee, and key employee listed in Form

course of business” exception to reporting

similar purposes do not include such

990, Part VII, Section A, and each

business relationships on Form 990, Part

purposes as short-term disaster relief,

member of a grant selection committee,

VI, line 2, does not apply for purposes of

poverty relief, or trauma counseling.

that includes the name and title of each

Schedule L.

Grants or assistance to a section 501(c)

person reporting information, blank lines

(3) organization.

for the person’s signature and signature

In general, an organization must report

date, and the pertinent instructions and

Column (a). Enter the name of the

business transactions in Part IV with an

definitions for Schedule L, Part III. The

interested person that benefitted from the

interested person if: (1) all payments

organization is not expected to distribute

grant or assistance. If the person has

during the tax year between the

such a questionnaire to a substantial

status as an interested person only

organization and the interested person

contributor or a related person to a

because the person is a substantial

exceeded $100,000; (2) all payments

substantial contributor, except (1) where

contributor, a family member of a

during the tax year from a single

the substantial contributor or related

substantial contributor, a 35% controlled

transaction between such parties

person advises the organization as to the

entity of a substantial contributor, or an

exceeded the greater of $10,000 or 1% of

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Instructions For Schedule L (Form 990 Or 990-Ez) - Transactions With Interested Persons - 2013 Page 3

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