Ethio American Foundation

“In 2025, the Ethio American Foundation successfully applied for a reclassification of its foundation status. On February 3, 2026, the Internal Revenue Service issued Letter 4425, officially updating the organizations status from a private foundation to a public charity under IRC Sections 509(a)(1) and 170(b)(1)(A)(vi) . This change reflects the Foundations commitment to broad-based public support and its mission to serve the Ethiopian-American community in Minnesota. All governing documents have been updated to reflect this shift in tax-exempt classification.”

“The Ethio American Foundation follows a formal review process for its annual federal tax filings. Prior to the electronic submission of Form 990, a complete draft of the return, including all required schedules such as Schedule A and Schedule O, is distributed to every voting member of the Board of Directors via secure electronic transmission. The Treasurer and the Executive Director conduct a technical reconciliation of the return against the 2025 Statement of Financial Position and Statement of Financial Income and Expense. Board members are given a designated period to submit inquiries or request clarifications. Once all questions are resolved, the board formally authorizes the signing officer to execute the return.”

“The Ethio American Foundation mandates that all directors, officers, and key employees complete and sign an annual disclosure statement identifying any potential conflicts of interest. The Board of Directors reviews these statements during its first meeting of the fiscal year. Furthermore, during any meeting where a financial transaction or contract is discussed, the presiding officer is required to ask if any member has a conflict regarding the matter at hand. Any individual with a conflict must recuse themselves from the discussion and the vote. The minutes of the meeting must reflect the disclosure, the recusal, and the boards determination of whether the transaction was in the best interest of the foundation.”

“For the initial tax year ending December 31, 2025, the Ethio American Foundation did not compensate its Executive Director or any officers. As the organization was in its startup and organizational phase, all leadership services were provided on a volunteer basis. The Board of Directors has established a policy that any future compensation for top management must be reviewed and approved by independent members of the board using comparability data from similar non-profit organizations in the Saint Paul/Minneapolis region . All such deliberations will be contemporaneously documented in the board meeting minutes to ensure compliance with IRS intermediate sanction rules and Minn. Stat. 309.53 .”

“For the initial tax year ending December 31, 2025, the Ethio American Foundation did not provide compensation to any officers, directors, or key employees. All leadership and administrative functions were performed by volunteers dedicated to the foundations mission. The Board of Directors has adopted a policy requiring that any future compensation for officers or key employees must be (1) reviewed and approved by independent members of the board, (2) based on comparability data for similar positions in the Saint Paul/Minneapolis non-profit sector, and (3) documented contemporaneously in the board meeting minutes. This policy ensures that the foundation avoids any excess benefit transactions under IRC Section 4958.”