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§ 3.1 MEANING OF GIFTorganization’s policy is to follow the donor’s advice, as long as the recommendedrecipient is a public charity and is prepared to accept the gift. Distributions are notto be made to individuals, private foundations, or other donor-advised funds.This organization qualifies as a publicly supported charity. 224 The questionin this instance was whether transfers to the donor-advised fund constitute therequisite support as contributions. The IRS, in answering this question, lookedto the regulations concerning the termination of private foundation status. Thereit is stated that, to effectuate a transfer of “all its right, title, and interest in and toall of its net assets,” a transferor foundation may not impose any material restrictionor condition that prevents the transferee organization from freely and effectivelyemploying the transferred assets, or income from them, in furtherance ofexempt purposes. 225The IRS wrote that the core issue is whether an organization exercises“dominion and control” over the asset so as to be considered its owner. Thoughthe IRS did not say so, the issue was whether donors’ ability to make these recommendations,and the organization’s policy of generally following these recommendations,amounted to a material restriction or condition. Without discussion, theIRS ruled that contributions made to this organization, destined for the donoradvisedfund, constitute support from the general public. 226(k) Employee Hardship ProgramsIt is common for a for-profit corporation with a large number of employees tohave or otherwise participate in a program, administered by a separate organization,by which the employees are provided financial assistance, in the form ofgifts and/or loans, in times of temporary extreme hardship due to circumstancessuch as natural disasters. The IRS has struggled with the tax law aspects of thisover the years, ruling on occasion that these organizations are tax-exempt charitableentities, with the private benefit to the employer incidental, and on otheroccasions that these entities cannot qualify for exemption because the privatebenefit to the employer is more than insubstantial. Also, if the separate organizationis a private foundation, 227 the IRS has on occasion taken the position that theprovision of this type of assistance can amount to self-dealing and the making oftaxable expenditures. 228 Another issue is whether contributions to an organizationadministering this type of program, often made by the corporation’semployees, are deductible as charitable gifts.In one instance, the IRS ruled that contributions made to such an entity constituteddeductible gifts. 229 The employer was a large corporation, engaged inretail sales worldwide, with many employees. The principal activity of a publiccharity, not controlled by the employer, was the making of gifts or loans to224 See § 3.4.225 Reg. § 1.507-2(a)(8).226 Priv. Ltr. Rul. 200037053.227 See § 3.4(c).228 See Private Foundations chs. 5 and 9.229 Priv. Ltr. Rul. 200307084. 91