Endowment grant from a PF to a PF -- see 53.4945-5(c)(2) -- grant reports are required for the year in which the grant was made and the succeeding two taxable years. If reasonably apparent that funds will not be used for taxable expenditures, the grantor PF can permit the reports to be discontinued. Grants to a controlled public charity (509(a)(1) or (2)) are not expenditure responsibility grants. They can be made without requiring any grant reports. However, a grant to a controlled public charity cannot be counted as a qualifying distribution for purposes of the 5% payout requirement unless the controlled charity redistributes / expends the funds by the end of its tax year following the tax year in which it received the grant and reports the same to the PF. An endowment grant would not be expended within that timeframe, and so an endowment grant to a controlled public charity cannot be counted as a qualifying distribution. It is still a charitable grant, and the PF can still make that grant, but it will have to make other grants that are "qualifying distributions" to satisfy its 5% distribution requirement.