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SAMPLE - DRAFT FOR COUNSEL REVIEW. Not yet executed by JIL Sovereign Technologies, Inc. or binding on any party.
501(c)(3) Templates

Expenditure Responsibility Framework

Section 4945 framework for ER grants to non-public-charity grantees.

Effective: 2026-05-04Last updated: 2026-05-04Version 1.0 (sample)

1. Purpose

For US Foundations granting to non-US Grantees that are not equivalent to US public charities, the alternative is the Expenditure Responsibility (“ER”) framework under IRC § 4945(h). This template framework supports ER compliance.

2. Required ER Procedures

  1. Pre-grant inquiry to ascertain whether the proposed grantee is reasonably likely to use the funds for the intended purposes.
  2. Written grant agreement specifying the charitable purpose, prohibiting use of funds for non-charitable purposes, requiring repayment of any portion not used for the specified purposes, requiring a complete annual financial report on the use of funds, and prohibiting use of the grant for any activity that would jeopardize the Foundation's tax-exempt status.
  3. Receipt of full reports from the grantee on the use of funds at least annually.
  4. Reporting on Form 990-PF Part XV-B for each ER grant.

3. Platform Support

The Platform supports ER compliance by (a) capturing the pre-grant inquiry as part of the application + Verdict Engine process; (b) generating CREB attestations of milestone deliverables that double as ER-compliant annual reports; (c) providing a 990-PF Part XV-B export from the Foundation reviewer console (planned).