Engagement with Government

Guidelines for Payments

Introduction

As a private foundation, the Foundation is prohibited by federal tax law from making payments or providing benefits to government officials unless the payments satisfy some very specific requirements.

To address these requirements, the Foundation has adopted these guidelines to apply to all Foundation payments to government officials and government employees. Please note that these guidelines only address the federal tax rules that govern the Foundation’s payments to government officials and employees.

Government agencies also have ethics rules that govern when a government official or employee may accept payment; these vary from state to state and agency to agency. We can help government employees and officials avoid violations and embarrassing situations by reminding them that they should always check these rules before accepting payments or benefits from us, our contractors, or grantees.

Payments to Government Officials

A. What payments are prohibited?

The Foundation is prohibited from providing honoraria, compensation, or benefit in any other form to federal, state, or local government officials. The Foundation is not permitted to make gifts to a government official if the value of the gifts is more than $25 in any calendar year. In lieu of an honorarium or other compensation, the Foundation may NOT make a donation to a charitable organization selected by the government official. The Foundation may not make an agreement to employ, contract with, or make a grant to a government official for any period after the termination of the official’s government service UNLESS the agreement is entered into not more than 90 days of the termination of government service.

B. What payments are permissible?

Limited funding for travel in the United States
Where government officials participate in one of the Foundation's meetings, panels, or other exempt activities, the Foundation can pay their travel expenses for travel in the United States. However, the maximum amount the Foundation can reimburse any government official is the official’s actual transportation cost plus an amount for all other traveling expenses actually incurred, such as food and lodging, not in excess of 125 percent of the federal per diem rate.[i] When the Foundation either pays these costs directly for government officials or provides funds for its contractors to pay these costs directly, such costs for government officials should not exceed 125 percent of the applicable per diem rates. It is sometimes difficult to furnish food and lodging at conferences without significantly exceeding these per diem limits. Please consult with the Law department in advance if you expect that keeping costs within the per diem limits will be a challenge.
Participation in RWJF-funded events
Where the Foundation is sponsoring a conference in furtherance of its exempt purposes, we can provide free registration to participating government officials. If the registration fee includes the cost of meals or other events or benefits, please check with the Law department before inviting government officials.

In addition, the Foundation may not be able to provide free registration to an event where it is not a significant sponsor or significantly involved in the programming of the event. Please consult with the Law department before issuing such invitations.
Payments to government agencies
The Foundation may reimburse a government agency, rather than the official personally, for a government official’s time, travel, lodging, or other expenses related to U.S. travel in furtherance of the Foundation’s charitable purposes, so long as it is the government agency, not the Foundation, that controls the selection of the government officials who will receive travel support.
Payments by grantees or national program offices
The Foundation may provide funds that our grantees or national program offices that are public charities or governmental entities use to make payments to government officials, unless the Foundation has required the grantee to select the particular government official. The Foundation may be aware that a grantee plans to use some of our grant funds to pay a government official so long as the grantee actually exercises ultimate control over the selection of the government official. Because RWJF appoints the members of our national advisory committees (NACs), these rules apply to members of NACs who are government officials.

C. Who is a federal "government official" for purposes of these rules?

On the federal level, a "government official" includes:

an individual who holds elected public office in the executive or legislative branch of the government of the United States;
an individual who was appointed by the president to hold an office in the executive or judicial branch of the government of the United States;
an individual who holds a position in the executive, legislative, or judicial branch of the government of the United States: which is not listed in Schedule C of Rule VI of the Civil Service Rules, or for which the employee's compensation is equal to or greater than 120 percent of the basic rate of compensation prescribed for GS-15 of the general schedule under Section 5332 of the Title 5, U.S. Code; [ii]
an individual who holds a position under the House of Representatives or Senate of the United States, for which the gross compensation is at an annual rate of $15,000 or more; or
an individual who is a personal assistant, executive assistant, or secretary to any person in the categories above.

D. Who is a state or local "government official" for purposes of these rules?

On the state or local level, a “government official” is an individual who holds an elective or appointive office in the executive, legislative, or judicial branch of a state, tribe, possession, political subdivision, or the District of Columbia; and receives gross annual compensation of $20,000 or more; and a significant part of whose activities include "the independent performance of policy-making functions.” Examples of positions that are not considered to exercise policy-making functions within the meaning of this definition include:

presidents, chancellors, provosts, deans, and similar officers of state colleges and universities;
professors, instructors, and other faculty members of state colleges and universities;
physicians, nurses, and other professionals employed in that capacity by public hospitals and public health agencies; and
superintendents and other public school officials, who are subject to the direction and supervision of a state board of public education.

E. What about offering grants, service contracts, or employment to government officials after they terminate their government service?

As noted above, the Foundation may enter into an agreement official to employ a government official before the official terminates their government service so long as the agreement is entered into less than 90 days of the termination of government service. Other conflict of interest rules also may affect a decision to make a grant, contract, or offer of employment to a terminating government official. Foundation staff should consult the Law department prior to beginning any discussions of future grants, contracts, or employment with any current government official.

Payments to Government Employees who are not Government Officials

Instances may arise where government employees who are not government officials as defined above are needed as consultants to Foundation programs. These government employees–who are not government officials–may receive payments from the Foundation in accordance with the procedures set forth below..

A. What is the process for paying federal employees?

A decision should be made first that the federal government employee is needed by the program. If the federal government employee is needed, the program staff person responsible should:

Determine any potential for conflict of interest for the Foundation given the individual's position in government.
Establish that the employee is not a government official as defined above.
Obtain a written statement of the supervisor of the federal government employee verifying that the employee is not a government official as defined above.
Provide the written statement with the consultant authorization form to the Law department for approval.
Upon approval by the Law department, submit the material with a completed consultant authorization form to the group director for approval, or in their absence, the group assistant vice president. The same rules apply to payments to NAC members who are government employees who are not government officials. Processing of such payments should include the written statement verifying that the individual is not a government official.

B. What is the process for state and local government employees?

A decision should be made first that the government employee is needed by the program. (A state government employee also includes employees of possessions, political subdivisions of states or possessions, and the District of Columbia.) If the government employee is needed, the program staff person responsible should:

Determine any potential for conflict of interest for the Foundation given the individual's position in government.
Unless the state employee falls within one of the categories of public employees who clearly do not exercise policy-making functions, consult the Law department for advice as to whether the employee exercises policy-making functions and is therefore a government official.
If the employee is not a government official as defined above, obtain a written statement of the supervisor of the state government employee verifying that the government employee is not a “government official” as defined above.
Provide the written statement with the consultant authorization form to the Law department for approval.
Upon approval by the Law department, submit the material for approval to the group director, or in their absence, the group assistant vice president.
The same rules apply to payments to NAC members who are government employees who are not government officials. Processing of such payments should include the written statement verifying that the employee is not a government official.

[i]The federal per diem rates are found on the U.S. General Services Administration website (www.gsa.gov).

[ii]Rates of pay for federal employees are found on the Office of Personnel Management website (www.opm.gov).

Employment Candidates Who are Government Employees

Offers of Employment to Government Officials

Because special rules apply to offers of employment to government officials and reimbursement of their interview expenses, it is important to identify employment applicants who are government officials prior to their first interview visit to the Foundation. Please contact the Law department prior to inviting a current federal, state, local, or tribal government employee to interview with the Foundation so that we can determine if the government employee qualifies as a government official.

The Foundation may make an agreement to employ a government official before the official terminates their government service, so long as our agreement is entered into less than 90 days of termination of the official’s government employment.

Payment of Interview Expenses for Government Officials

Transportation. Payment of transportation expenses related to any interview should be limited to actual costs for domestic transportation.
Lodging. Payment of lodging expenses must be limited to and 125 percent of the applicable U.S. General Services Administration (GSA) per diem rate applicable for the interview location and year and month of the interview. GSA per diem rates may be found at www.gsa.gov/per diem. Notice of these reimbursement limitations should be provided to the interview applicant at the time the interview is arranged. (Note that for visits to Princeton, the Marriott or the Westin may make rooms available to the Foundation at GSA rates.)
Meals and Incidentals. The value of meals and incidentals either provided or reimbursed also is limited to 125 percent of the applicable per diem. Note that on travel days the per diem is 75 percent of the per diem listed at www.gsa.gov/per diem.
There also can be rules imposed by the government on its employees related to travel, food, lodging, and other items of value provided by prospective employers to employees, including prohibitions, dollar amount limitations, and/or disclosure requirements. The Foundation should confirm with the candidate that they are familiar with and following all applicable rules that apply to their position.

Other Considerations Before Making Offers of Employment to Current Government Employees

Officials and employees who engage in employment discussions with private employers may be required by the rules of the agency to disclose such discussions and/or recuse themselves from certain activities.
Former government officials and employees often are prohibited from interacting with government on their new employer’s behalf after departing government service.
It is advisable to understand the specific rules that apply to a prospective employee before significant employment discussions take place and before providing any travel, meals, or other items of value to a potential hire.
It also is common for departing employees to request and receive a “departure memo” from their government office before leaving government service that explains the specific employment restrictions applicable to them after departure. You may wish to consult with the Law department to determine whether it may be beneficial to request a memo for a new employee leaving government service.

Checklist for Government Officials on NACs

Reimbursement and Payment Limits

Because RWJF appoints all members of our programs’ national advisory committees (NAC), rules restricting private foundation payments to government officials apply to both the national program offices (NPO) and RWJF. If any of a program’s proposed NAC members are federal, state, or local government employees, please consult with the Law department so that we may determine if the government employees meet the definition of a “government official.”

Government officials serving on NACs will be subject to the following reimbursement and payment limits. These limits should be reflected in the initial NAC invitation letter.

Stipends, honorariums, and/or gifts and event favors exceeding $25 in any calendar year: Prohibited
Travel expenses
- Hotel rooms for a government official may not exceed 125 percent of the General Services Administration (“GSA”) rates for the particular location. See https://www.gsa.gov/travel/plan-book/per-diem-rates/per-diem-rates-lookup for current rates by location.
- Daily food and drink expenses provided by or reimbursed by RWJF or the NPO (including food, drinks, taxes, event room, service fees, and gratuities) are typically limited to 125 percent of the GSA rates for the particular location. On travel days, the standard GSA rates for meals are reduced by 25 percent to and from the event.
  
  Note: Lodging and meal expenses may exceed 125 percent of the applicable GSA rate if:
- The meeting includes more than 25 persons (excluding all government officials, RWJF staff, Trustees, and contractors); or
- All government officials have their travel approved by supervisors under the procedures of that agency/office. (Note: This exception typically only applies in the case of federal government officials.)

In cases where higher expenses are permitted, there is still a cap on expenses so expenses should generally not exceed more than 275 percent of the applicable GSA rate (or reduced GSA applicable to meals if a travel day). If per person expenses are expected to exceed more that 275 percent of the applicable GSA rate, the NPO is required to discuss the details with RWJF before the NPO commits to or incurs expenses.

Transportation costs may be reimbursed in full based on documented actual expenses.

What's the Limit?

A Tool for Payments to Government Officials for RWJF Consultants and Expenditure Responsibility Grantees

Background: As a private foundation, Robert Wood Johnson Foundation must observe a prohibition on paying compensation to government officials and limits on reimbursing or directly paying for travel and meal expenses of government officials.

These limitations also apply anytime RWJF selects or invites a government official’s participation, or when a contractor or noncharitable grantee is carrying out work with RWJF funds. Government agencies also have ethics rules that govern when a government official or employee may accept payment; these vary from state to state and agency to agency.

Who is a government official?

Not all government employees are government officials. On the federal level, a “government official” includes:

an individual who holds elected public office in the executive or legislative branch of the government of the United States;
an individual who was appointed by the president to hold an office in the executive or judicial branch of the government of the United States;
an individual who holds a position in the executive, legislative, or judicial branch of the government of the United States: which is not listed in Schedule C of Rule VI of the Civil Service Rules, or for which the employee's compensation is equal to or greater than 120 percent of the basic rate of compensation prescribed for GS-15 of the general schedule under Section 5332 of the Title 5, U.S. Code;[1]
an individual who holds a position under the House of Representatives or Senate of the United States, for which the gross compensation is at an annual rate of $15,000 or more; or
an individual who is a personal assistant, executive assistant, or secretary to any person in the categories above.

On the state or local level, a “government official” is an individual who holds an elective or appointive office in the executive, legislative, or judicial branch of a state, tribe, possession, political subdivision, or the District of Columbia; and receives gross annual compensation of $20,000 or more; and a significant part of whose activities include "the independent performance of policy-making functions.” Examples of positions that are not considered to exercise policy-making functions within the meaning of this definition include:

presidents, chancellors, provosts, deans, and similar officers of state colleges and universities;
professors, instructors, and other faculty members of state colleges and universities;
physicians, nurses, and other professionals employed in that capacity by public hospitals and public health agencies; and
superintendents and other public school officials, who are subject to the direction and supervision of a state board of public education.

What are the limits?

The limits for reimbursing expenses vary based on a number of factors, including event location, event size, and whether or not a day is a travel day for participants. If the event is one day, you should use the limits for a travel day.

The tool below will help you determine applicable limits. If you are concerned that you may exceed the limits, contact your Foundation representative to discuss before you contract for the meals or hotel. Foundation staff may reach out to the Law department for additional assistance.

TIPS

As a practical matter, we do not want you to single out government officials at group events, so we encourage you to plan your menus and events to keep under the limit for all participants.
If the cost of food/beverage you are providing in a day already reaches the maximum amount of the per diem amount listed above, you will not be able to reimburse the government official for meals not provided at the event (e.g., meals in transit). Invitations to government officials should be clear about what will be provided or reimbursed.

[1] Rates of pay for federal employees are found on the Office of Personnel Management website (www.opm.gov).

Other Resources

Engagement with Government Guidelines