State regulators tell us that when they examine a foundation's expenditures, they look for evidence that foundation managers have thought about the various areas in which expenses arise and have developed a reasonable policy to guide spending. Following are some of the questions that may be raised when considering what administrative expenses the foundation will cover for employees and directors who travel on behalf of the foundation. Meetings should be planned at sites that are convenient, economical and conducive to the work being done. The foundation may wish to set a maximum hotel room rate and provide parameters for appropriate on-site meal prices. If foundation personnel travel frequently, the foundation may wish to negotiate for discounted rates with a certain hotel chain or in a particular city.
Many corporations insist that their employees fly coach class absent very special circumstances.
Some factors to consider may include the length of the flight or whether the employee or director has a medical condition that requires him or her to have more space. Indeed, paying spouse travel expenses will in many cases be an act of self-dealing for the foundation unless treated as compensation to the foundation managers. A travel policy should set forth circumstances in which it will be permissible to include spouses in foundation events and how expenses are to be handled. As expenditure by charities come under heightened scrutiny from federal and state authorities and the press, foundations can contribute positively to the charitable sector's image by stressing their tradition of responsible and effective philanthropy. Carefully considering how charitable dollars are spent is part of that effort.