December 12, 2013; The Smoking Gun

The Jane Fonda Foundation, Inc. is a private foundation established in 2004 by the actress/director/social activist. The website The Smoking Gun, which specializes in “true crime” headlines and accompanying source documents like mug shots and police reports, reports that Fonda’s foundation, with assets of about $800,000, has not made any grant awards since a $1,000 gift was given in 2006.

TSG’s story says that private foundations are required to give five percent of their assets each year or face IRS penalties, which is approximately correct. One major consideration is that foundations are allowed to count administrative costs as part of the five percent. Fonda’s foundation expenses are very small, based on review of its Form 990-PF filings for 2009, 2010, and 2011. It should also be noted that the foundation paid $500 each year in “federal taxes,” which may or may not have been the excise tax levied by the IRS on foundations that do not disburse sufficient funds in a given year.

The story appears to be a tempest in a teapot, despite its red-lettered link (indicating “hot,” we suppose) from the Drudge Report on December 12.  However, the focus on the Jane Fonda Foundation does lead to a teachable moment or two for nonprofit organizations.

First, many nonprofit leaders are still unaware that their Form 990 IRS filings are available to the general public without charge, for any reason, both through GuideStar and through the Urban Institute’s partnership with the Foundation Center. Anyone can read, (mis)interpret, and report on any nonprofit based on those filings. How a nonprofit completes its IRS filings matters, and not just to the IRS—there’s a much broader audience to be considered.

Second, particular to the Jane Fonda Foundation, is the role of Ms. Fonda herself as reported to the IRS. The foundation reports that Ms. Fonda is the chair, president, director, and secretary of the foundation. There is only one other director listed, which means that the foundation is representing to the IRS (and the public) that its leadership consists of two people with no employees—though, strangely, Ms. Fonda is listed four times, once per title. Nonprofit organizations, even private foundations, typically have at least three board members, and usually more.

Now that Ms. Fonda’s private foundation has been publicized, will it become active? Is it worth a few hundred dollars a year to keep the foundation structure operative, ready for use at a future date?—Michael Wyland