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The money flows from - and to - local foundations

   Federal authorities want to make sure that private foundations can survive forever, so they require foundations to donate only 5 percent of their assets to charity annually, on average. Critics think the threshold is too low, but supporters say the 5 percent allows foundations to invest the rest of their money, so that donations will continue to flow in future years.

   As part of that desire for the giving to continue, federal lawmakers also decided that foundations can count some of their expenses as charity when calculating the 5 percent.

   And the expenses-as-charity can include compensation to foundation trustees.

   Again, some foundations say that's necessary for foundations to survive. Critics say it's double dipping, getting a tax break for using a foundation to donate money, and then getting some of those same foundation dollars back as professional fees.

    Locally, one foundation stands out - the Swede Anderson Foundation of West Seneca, run by
the Travers family. The foundation counted three-fourths of its expenses - $160,000 - as charity to meet the 5 percent minimum over a five-year period. Many of the expenses were paid to Travers family members and to the Travers & Co. accounting firm, which provided accounting services.

   Federal regulations prohibit self-dealing: the paying of professional fees to foundation contributors, managers and family members. The self-dealing regulations, however, also offer a string of exemptions that Swede Anderson and other foundations typically claim.

   "My son's an attorney. I'm a certified public accountant. We have the ability to do all these things," Peter R. Travers said. "Why would you want to pay a third party more?"

   Some want Congress to take up the issue again and enact tighter laws governing foundation spending.

   What do you think?

   Read the full story.

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