Compliance and infrastructure

Once you’ve figured out which philanthropic cause to support – and how to do so – you’ll need to think about compliance and infrastructure. 

Compliance includes adhering to various regional and geographic requirements, which might include state bylaws, tax exemptions, and public disclosure requirements – among many others. 

And infrastructure is what you’ll need to bring your vision to life – like personnel, technology, and facilities. 

Generally, the more complex your setup, the more compliance and infrastructure you’ll need. 

While it might not be the most exciting activity, putting in the legwork to get compliance and infrastructure straightened out now will help you achieve your goals in the longer term. 

And you might want the help of third-party professionals with some things – like accounting, tax, and legal compliance.


How to manage compliance


If you follow these five best practices, you’ll be well set-up to navigate compliance – and make a real impact with your philanthropy.

1) Establish a board

In some jurisdictions, a board may be required depending on your giving vehicle. Even if it isn’t, you might consider creating one to provide overarching guidance and advice. A diverse board could lend differing perspectives, while a board comprised of family would bring your people together.  

2) Have a mission statement

A clear mission statement sets a roadmap for your philanthropic work. Ideally, you’ll review it every three to five years – that’s often enough to allow for course correction but not so often that you lose direction and focus. 

3) Create a rolling five-year projection

A projection is useful for planning ahead – for both giving and tax purposes in certain jurisdictions. It can help you stagger grants between years, for example, to ensure your annual philanthropic giving goals or statutory requirements are met.  

4) Do your due diligence

Due diligence on a nonprofit is a must. This can be as simple as a check of their tax-exempt status, if applicable, or an online search of the latest news. A more robust process might include a review of the organization’s health through site visits or interviews. 

5) Set a documentation policy

Since the burden of documentation proof falls on you, it’s important to have an effective policy around how you’re going to record and retain your paperwork. This is necessary to substantiate any grants you disburse, and it’ll help with your financial statements and tax returns too. 

“As granting models become more sophisticated, additional expertise may be sought to help adhere to the best practice compliance. The use of experts to help set the programmatic initiative, including the goals and milestones to achieve can help to frame the grant agreement and monitoring and evaluation to approval of installment payments.” 

– Karen Kardos, Head of Philanthropic Advisory at Citi Private Bank


Infrastructure: Getting the right support in place


Everything that supports the execution of your philanthropic goals is considered infrastructure. This can include personnel with legal, tax and accounting expertise, office facilities, software systems, technology components, and experts in your area of focus. To achieve your goals, you’ll need to put some sort of infrastructure in place.

You could choose to develop infrastructure in-house or outsource it. Your decisions will ultimately depend on your liquidity, how much capital you have, your scope of giving, and the longevity of your goals. 

If your scope of giving compared to your assets is large, and you’re looking at a relatively long time frame to reach your goals, you could consider developing infrastructure in-house. Likewise, if you have more upfront capital and are low in liquidity, then it could be financially feasible for you to invest in-house. 

While most people tend to view infrastructure in physical terms, investing in people is important too. Employing the right people who share your vision may well be the best infrastructure you could have.



Compliance and infrastructure will help you achieve your goals in the long term – and the more complex your setup, the more of it you’ll typically need.

It’s good compliance practice to establish an advisory board, have a clear mission statement, create a rolling five-year plan, conduct due diligence, and set a documentation policy.

Whether you choose to develop in-house infrastructure or outsource your needs will depend on your liquidity, how much capital you have, your scope of giving, and the longevity of your goals.