A number of universities and other organizations have established closely affiliated, but separately incorporated, organizations to facilitate the administration of research and other programs supported by federal funds. Such legally independent entities are often referred to as “foundations,” although this term does not necessarily appear in the name of the organization. An institution awarded an endowment grant under section 464z-3(h) of the Act or using designated grant funds for endowment purposes under section 464z-4(f) of the Act may designate a foundation associated with the institution to receive the endowment funds only for investment purposes if:

(a) The institution assures in its application that the foundation is legally authorized to receive the endowment funds and to administer the endowment funds in accordance with the regulations set forth in this part;

(b) The foundation agrees to administer the endowment funds in accordance with the regulations in this part;

(c) The institution agrees to be liable for any violation by the foundation of any applicable regulation, including any violation resulting in monetary liability; and

(d) The grantee institution has control and is responsible for the administration of the grant accounts.