Ask the Editor - To the Point

A member of our nonprofit swim club has offered a bylaw amendment requiring that Board minutes be made readily available to all members and that votes not taken in executive session be incorporated in the minutes, including the voting results by name. Votes on sensitive issues (personnel for example) need not be so published.  What do you think? Answer

A person who claims I owe him money has filed a lawsuit against my California charity in effort to recover the claim.  He alleges that the charity is an "alter ego" for me personally (which is untrue) and that entitles him to the money in the charity. Is this legal? Answer

Can our small grass roots nonprofit corporation refuse membership to people who do not support our Mission?  They disrupt every meeting, waste precious time, and cause us to lose our focus.  They have also tried to change the Mission to serve their immediate purposes.  Our bylaws require that members support our Mission, Purpose and Goals.  Is that enough? Answer

I see many cases where staff at a nonprofit doesn't work very hard, is not organized well, or otherwise appears to be what we would call "classic under-performers" in the for-profit business world.  Is there anything to legally prevent a charitable organization from basing part of employee compensation (bonuses) on the nonprofit’s success or the success of an individual’s role within the organization? Answer

Is it against the law to record a meeting of the board of directors of a nonprofit organization? Answer

We are considering whether our charity should raise funds with an internet auction or through text messaging.  Do you see any registration problems? Answer

Our band booster organization is incorporating and will seek 501(c)(3) charitable recognition. The officers insist that no provisions for an annual audit are necessary; they believe that having several of the members review the books is sufficient. Is a 501(c)(3) not required to have an external audit? Answer

We are a 501(c)(3) community theatre that produces a play program for every production. We are trying to encourage local businesses and individuals to buy space in it to advertise, or to send personal messages to the cast/crew. We indicate in writing that the charges are a direct donation to the theatre. A candidate for local public office wants to purchase ad space. Can we do this? Answer

Does a nonprofit have to be 501(c)(3)?  We are incorporating and filing/drafting by-laws. Can the 501(c)(3) portion wait if we don't take in any funds and can give charitable contribution receipts by an umbrella org?  Can we still call ourselves a nonprofit until we get 501(c)(3) status? Answer

We have a 501(c)(3) youth sports program. Some members of the board want to allow restricted gifts to the organization for the purpose of paying a specific player’s fees to participate. I have an ethical issue with this type of restriction but is it a valid opportunity? Answer

If a majority of board members of a nonprofit corporation wish to propose a motion of "no confidence in" or "resignation of" the president, does the president have a "conflict of interest" in voting on this motion?  How is such a motion handled in the case of serious dereliction of duties by the president, none "illegal" but basically taking actions without board approval or refusing to carry out actions voted on by the board? Answer

A charitable organization is considering a grant to another nonprofit.  One individual serves on the board of both organizations. Even though this conflict of interest was disclosed, should the board member abstain from voting on the grant or should the board member vote if he/she believes that it is in line with the missions of both organizations? Answer

In a sole member corporation, does the Board of Directors simply serve in an advisory capacity?  Where can I get a sample set of bylaws that shows how this works? Answer

Does a 501(c)(3) have a limit on the total percentage it can take in as fees for service.  We operate 3 dental clinics on a sliding fee scale. Does our yearly income have to be less than X% revenues generated from services, with a balance coming from grants, fund raising and other donations? Answer

An employee of our nonprofit religious organization was responsible for getting sponsors for our programs and for organizing and conducting mission trips to another country.  When she quit, did she have the right to take our sponsor list and mission trip participant list and to use in soliciting them for another nonprofit? Answer

May a 501(c)(3) nonprofit use general funds raised from donations to support the operations of a for-profit subsidiary operating discount stores (operating daily)? Answer

We have a large email list but do not know the primary state of all of the people on it.  Which states require registration before we solicit for charitable contributions and what should we do about it? Answer

After a Board member has resigned, what legal documentation must be amended to remove his/her name from the nonprofit corporation's 501(c)(3) filing? Answer

May a 501(c)(3) organization return a gift that was given to it if the donor requests the money be given back? The gift of $50,000 was given 5 years ago to publish a book that hasn't been finished yet.  The book will probably be finished this year so at that point will be published if the money is still there. Answer

Our 501(c)(3) social service organization recently applied for a grant from a public charity that collects contributions from the general public and then makes larger grants to organizations they think can help alleviate problems in the community.  In the interest of “transparency and accountability,” they have asked to see copies of our board minutes for the last year.  Can they do that? Answer

I founded a nonprofit humane corporation 4 years ago and was the sole founder and operator until a year ago. I had a board of directors consisting of 5 members. The board recently voted 3 - 2 to terminate me as executive director. I was not given a hearing and was told after a special meeting that I was terminated because I did not possess the skills that the board expected. My termination was really due to a personality conflict between me and one of the board members who got two of the other board members to vote her way and remove me.  Do I have any rights to the organization as founder and the fact that I wasn't given a hearing to defend myself? Answer

We are a 501(c)(3) nonprofit research organization.  A 501(c)(6) business membership association is starting to show strong support for us, as our research is valuable to them. Can the (c)(6) trade association ask its members to support us (either directly, or by collecting donations from members and then sending us one large donation check)?

What charitable solicitation registration requirements would be in play? We know that most "member" organizations are exempt from registrations, but if they are soliciting on behalf of our 501(c)(3), the waters seem to get muddy. Help! Answer

We are a small 501(c)(3) animal rescue that has applied for and been turned down for insurance.  Our board members are concerned about personal liability.  What are the risks of our board members being sued individually? Answer

I am on the board of our 501(c)(3) youth football nonprofit.  Our president has harassed and physically raised a hand to a parent.  He is also profiting from our organization in his printing business, and we suspect that he is taking money from our organization illegally.  If we complain, he will kick us out.  When I complained, after he was re-elected president, he refused to give me a badge and told me to leave the field.  Can he legally do this?  Where can we go for help? Answer

Is it legal for a 501(c)(3) charitable organization to donate to a 501(c)(6) trade association? Answer

Can we sell ads in our nonprofit newsletter? Answer

Many states offer exemption from charitable solicitation registration if a charity raises less than a specific dollar amount.  Do these dollar limits apply to funds raised within each state, or do they apply to funds raised in the aggregate in all states? Answer

I am a board member of our local youth sports league.  One of our general members is never happy with our coaching selections and continually harasses the entire board. We would like to remove him so we can actually focus on the league. Can we legally remove him as a member (thus not allowing his child to register to play in our system)? Our bylaws are silent on this issue. Answer

Does our volunteer school group need to have 501(c)(3) status to raise funds for the activities we do for the children?  I've been treasurer for 4 years and I was told that we need to do this.  Is it true?  We have an Employer Identification Number - isn't that enough? Answer

As of May 15, the IRS can declare that any nonprofit that has not filed a Form 990 for three years is no longer a tax-exempt entity.  If a 501 (c)(3) has had its finances managed by another 501(c)(3) and the larger 501(c)(3) has filed a consolidated Form 990 for the past three years without mentioning that it is the fiscal agent for the smaller nonprofit, is the smaller nonprofit going to lose its tax-exempt status because it has not filed separately for three years? Answer

Our 501(c)(3) organization owns an historic property.  We purchase many items online with a credit card and would like to obtain a card that does not require a personal guarantee. How do we go about getting one?  We have an excellent credit rating. Answer

Our organization raised about $5000 10 years ago for a building that was never built. We still have the money and would like to put it in the general fund. We do not know who all of the contributors were and the ones we do know about are no longer around. Can we transfer the funds? Answer

Are there standards for solicitation materials used by organizations with a 501(c)(3) tax-exempt status?  I'm concerned about a particular organization that insists the U.S. government is covering up the existence of UFOs, and part of the material they use to solicit donations has been repeatedly challenged and disproved. Can they get away with this? Answer

Can a Certified Public Accountant draft bylaws for a start-up nonprofit? Answer

I belong to a 501(c)(4) community association that has a separate 501(c)(3) charitable foundation to support our charitable programs.  We are being told that the boards must be separate with either no overlapping members or a small percentage of overlap.  I cannot find anything that addresses this. Can you help? Answer

Should our bylaws spell out our organization’s purpose and mission?  Isn’t it helpful to have a clear statement of purpose as one of the first provisions? Answer

I am thinking of starting a new 501(c)(6) trade association and providing all of the initial funding, but I would like to get it back when the association is able to pay it. Someone told me that any payment to me would be considered a preferential payment and could jeopardize the organization’s exempt status.  Is that true? Answer

I am seeking 501(c)(3) charity status and questioning whether or not to become incorporated.  Why or why not should one be incorporated? Answer

We just learned that our daughter's private school is a 501(c)(3).  We are told that means that a portion of the tuition is tax deductible.  Can you give me the details regarding this? Answer

Our 501(c)(3) child care facility wants to allow another 501(c)(3) agency to take over management of the child care program.  We have a mortgage on the building and will "lease" it to the other agency to continue our mission.  Is this legal?  Will we have to pay real estate taxes or lose our (c)(3) status? Answer

If one member of the board of directors of a nonprofit corporation will not approve the minutes of a previous meeting because the director disagrees with what is written (while all others agree), how is this resolved? Answer

The director of our 501(c)(3) dance organization is also a paid teacher of the dance studio where our practices are held.  The studio owner and the director have decided to hold auditions for the nonprofit organization and the studio teams at the same time and charge a fee to each girl trying out. They have also required that to be a member of the nonprofit program you must also be a team member of the studio, which benefits the studio owner and the teacher/director.  Does this jeopardize our charitable status? Answer

My father had real estate worth $50,000 that he deeded to my brother and me.  Later he decided he wanted us to deed it to my Section 501(c)(3) ministry, which we did.  My father has died and I am wondering if there is a way my brother and I can get this inheritance back without taxation. Answer

We are planning to start a nonprofit and another nonprofit group that closed down is offering us its 501(c) status for our new organization. Is this possible? Answer

Is it legal for a charitable Humane Society to receive donations and use a staff vet to perform regular vet duties, such as surgeries, vaccines, etc. for the general public? Obviously, the Humane Society can charge reduced fees because of the donations. Is there something that protects a vet in a small business who is unable to compete with the reduced fees? Answer

I am interested in converting a financially struggling 501(c)(3) nonprofit to a for-profit. My idea is to continue the mission of the organization but operate as a for-profit. Is this possible? Answer

Our 501(c)(3) retirement center often receives a gift like a lift chair or motorized wheelchair when a resident passes on.  The gift usually comes when a family member is clearing out the person's apartment.  To whom should we acknowledge the gift?  Should it not be from 'the estate of the deceased' if the item was in their possession at time of death - regardless of who may have purchased it and/or when? Answer

A nonprofit organization wants to partner with me in a situation where I would provide my tax preparation services to individuals attending an event and have the individuals pay me directly at a discounted rate. The nonprofit will secure the location under its name and run the event. Is this legal and if it is, should I be collecting fees directly?  Also, how should a contract be set into place? Answer

Does a very small, rural food pantry need a 501(c)(3) for the public to donate small amounts of cash or food? We have donors who would like to take their $25 donation as a charitable deduction on their income tax return. Answer

May a 501(c)(3) college donate a horse to another charity if the horse was donated to the college and has not been there for 3 years? Is there any law or regulation on this item? Answer

Is a whistleblower policy created solely to protect staff or do its protections extend to protect trustees and volunteers? Answer

We have recently formed a nonprofit in support of the arts. We have just submitted the application for 501(c)(3) status. At what point may we call ourselves "tax-exempt" for purposes of solicitation? Answer

Several years ago an individual's membership in our 501(c)(3) organization was revoked for what was considered an infringement of a by-law. The person was never offered the right to appeal - he would now like to rejoin the organization. Do 501(c)(3) organizations usually offer the right of appeal? Answer

Do you consider it a conflict of interest for the executive director to also serve on the board? Answer

Our nonprofit has a social worker who assists elderly clients apply for benefits and referrals to other organizations.  She is well respected and has always been very ethical. Her husband was the realtor who sold the home of one of our clients who moved to a retirement community. I'm concerned that clients might be being steered by our social worker when they are in need of a realtor and that it is at least an appearance of improper influence or possibly a conflict of interest.  Should she be told to not speak with clients about her husband's profession or should she give them a list listing several firms (including her husband's) but not list individual broker's names? Answer

You have answered several questions about sole member protection for founders of nonprofit organizations.  Would a sole member clause in the bylaws be sufficient?  I recently filed the articles of incorporation that only asked for the 3 initial directors.  Do I need to amend the articles to include sole membership? Answer

I am involved with my local 501(c)(3) kids’ sports league and want to do a 50/50 Super Bowl pool, where half the money goes to the winner and half the money goes to our local league and another charity.  Is this allowed? Answer

I am currently President of our school's parents’ organization and recently learned that over the past 10 years "monetary gifts" were given to every employee at our school. This information was never passed on to parents, so in addition parents collect class funds toward a gift. Our purpose is to raise $25,000 for a school assessment, and to enrich the lives of our students. Is it wrong to utilize fundraising money to furnish Christmas gifts for teachers without telling the members? Answer

Our 501(c)(3) educational organization operates solely on membership contributions.  One of our primary activities is to work one on one training local governments on the laws which allow them to coordinate local plans and policies with those of state and federal agencies.  This includes traveling to their locations and spending several days.  Local governments are reluctant to make contributions to us for fear of showing favoritism, so we often recoup only travel costs.  May we charge a fee for these services? Answer

I'm a new volunteer member of a nonprofit board of directors and am being asked to sign a non-compete agreement.  The agreement covers all areas of the nonprofit’s involvement (marriage and family counseling, youth ministry, music, drama, martial arts, etc.) and applies to a 5-mile radius of any office or ministry location and for 5 years after I leave the board.  Is it customary to ask a volunteer board member to sign a non-compete agreement? Answer

I am a director on a three-member board and also one of the founders and incorporators of the nonprofit corporation. Of late, the other two board members discuss issues amongst themselves and do not involve me in matters of importance and decisions. Is this legally valid? Answer

A new member of our Board, who is a bookkeeper, wants to have an electronic copy of our financial system so that she can go through and check everything out.  I feel very uncomfortable giving her a copy of all our information. Am I just being paranoid? We have nothing to hide. Answer

A 501(c)(7) social club formed a nonprofit organization to carry certain charity and scholarship programs for the club. The nonprofit received 501(c)(3) charitable status from the IRS. Can the 501(c)(7) club appoint or elect the board of directors of the nonprofit? They would hold separate board meetings and maintain separate minutes, records, bank accounts, etc. Answer

Our 501(c)(3) is creating a new website and one of our donors has offered to pay the final payment.  Can he pay the company directly, and, if so, can we give him a receipt for an in-kind donation for the amount he paid on the nonprofit’s behalf? Answer

Is the local Archdiocese exempt from charitable giving laws?  The Archdiocese just completed a five year capital campaign for each diocesan high school.  Each school had a school specific case statement.  Now that the campaign is over, the Archdiocese has announced the closing of three schools.  Shouldn't the donors (of millions of dollars) be given the opportunity to redirect the funds or have them returned?  What laws govern? Answer

Someone on the board of our 501(c)(3) charity feels we are required to send a letter to each person who bought a ticket for our recent fundraiser to let them know the actual cost of the dinner so they can write off the "donation." The same person feels we have to notify silent auction winners of the actual value of the items they bought compared to the payment.  Are we required by law to do this? I can understand having that information available if they ask, but to send out 300 letters...yikes! Answer

Our 501(c)(3) organization recently received a Chinese “knockoff” of a patented U.S. product for sale at our silent auction.  A representative of the company holding the patent agreed that it was a fake.  We told the donor and withheld it from sale.  The donor wants the item back. Should we give it back or give it to the company?  Do we have the right to give the donor’s name to the company? Answer

We are about to implement a more formal pro bono attorney program within our Legal Center to be able to meet the overwhelming needs of our clients.  We would like some input about showing these in kind services on our financial statements.

We could be talking about a large dollar value for these volunteer services and I am not sure if it would skew our bottom line revenue to include all of this.  I understand from our auditor that we have a choice about whether to include it or not.  Do you have thoughts on this? Answer

Unlike many nonprofits that are operating under the crushing weight of our economy, we can (attempt) to raise additional funds by focusing additional efforts on ad sales for our magazine. Since another salaried employee is outside our budget, we are curious if we, as a 501(c)(3) organization, could hire a commission-only sales rep for classified ad sales or add a commission incentive for the display advertising rep.  These commission programs would only apply to ad sales and not fundraising, of course. Answer

A private foundation provided a very large portion of the money used to construct a new facility for a private school. Upon completion of the facility, the foundation was not pleased with the management of the school.  It demanded that all of the existing board resign and a new board was implanted to run the facility. No written agreements were in place when the donor provided the construction funds. Has a crime or legal violation been committed? Answer

I am a professional musician and recently accepted an organist/pianist position with a new church.  I have been told by the finance person that allowing me to teach lessons to church members 2 afternoons a week in a room of the church would jeopardize the church's 501(c)(3) status.  I have offered to pay rent, or fee, etc., but she stands negative on this matter. Is she correct? Answer

Recently the new President (and co-founder with me) of a 501(c)(3) charitable corporation has begun trying to fire the entire board of directors. The new president says our legal and financial filings are all “solely under my name” and has encouraged the directors to resign. The IRS documentation was under both names (his name as treasurer and my name as president.) Can the new president hijack the organization? The board is 6 to 2 against him, but the Bylaws do not specify how to remove a president and for which reasons? Can we fire him? Answer

When a 501(c)(3) charity encourages its friends and donors to share an appeal for support with their friends through a social networking medium, does this raise legal concerns? Answer

May a 501(c)(3) private school give a house to the family members who started the school in exchange for over 50 years of unremunerated service? Answer

If a 501(c)(3) medical clinic for the under- and uninsured charges patients fees for services that don’t cover the total costs of operation and raises the remainder of the budget from charitable contributions, what can be the ratio of fees to contributions? Answer

When the state nonprofit statute requires notice of a members’ meeting to be given either personally or by mail, does this include electronic mail?  We would like to include email communication/notice in the bylaws as the means of communication. Answer

Our for-profit organization would like to host an event to raise funds for a charity.  What is the legal percentage/portion of the proceeds that should be donated to the organization for it to be considered a charitable event? Answer

I am a member of a 501(c)(3) service club. I am told that the club cannot make a contribution to a 501(c)(3) youth organization because my wife is a member of its Board and that such a gift is prohibited by the IRS as a conflict of interest. Is this true? Answer

I am a member of the board of a 501(c)(3) horseback riding facility.  Another facility near us calls itself a "nonprofit" organization on its web site but is not on the government's list of 501(c)(3) organizations.  Can an organization advertise itself as a nonprofit, but not be a 501(c)(3) organization? Answer

Our 501(c)(3) organization, chartered to teach, promote, and foster a particular art form, has members who vote for directors and some officers in periodic elections.  Members receive a monthly newsletter which covers internal organization news and events such as seminars and shows.  They also receive an annual membership directory and some degree of coverage under the organization's general liability insurance.  The per-member cost of these services roughly equals the member's dues.  Are the members' dues tax deductible? Answer

As a board member of a charity, I've been asked to report the number of hours that I work per week even though I receive absolutely no compensation.  I think this is a huge infringement on my privacy and I'm wondering if the IRS truly intended to ask for volunteer hours. Answer

The bylaws of a nonprofit corporation state that it is a membership corporation that requires a membership vote to dissolve, but as a practical matter it stopped operating a number of years ago and has no current members. How do the 3 remaining trustees go about dissolving the corporation? Answer

It seems that there may be an overlap between “private inurement” and “excess benefit.”  What criteria are used to distinguish one from the other?  It seems that excess benefit is the lesser sin and poses a smaller risk to losing one’s exempt status. Answer

Our 501(c)(3) grassroots advocacy group is composed of low-income individuals, and our board is elected from our membership.  While always excited about their part in the organization, the current board has become detrimental to the organization, community-wise and work-wise.  We are thinking of disbanding the board in order to reappoint a new board.  But, if we disband the board, is it the same as disbanding the organization?  We want to ensure the continuation of the organization and maintain the support of our community members. Answer

What is the duration of a 501(c)(3) exemption? Answer


How do you account on the Form 990 for the revenue from a fundraising event?  I understand that if the donor/payor pays $300 for the gala dinner that is worth $50, the revenue has to be divided on the Form.  How do you do it? Answer

My husband and I have a small foundation and want to make a grant to our church for our at-risk youth mentor program.  The pastor says I can’t specify where the money is to be used.  Is that true? Answer

I have incorporated a nonprofit and obtained a tax ID number, but haven’t filed yet for 501(c)(3) status.  I am about to host a fundraising event.  Can I solicit money for the nonprofit or will I need to pay taxes on the money donated until the exemption letter is received? Answer

We have a 501(c)(3) youth sports club. Can donations be used to cover the costs of an in-need player (uniform, fees, etc.) or do all donations have to be spread so that all players (regardless of need) benefit equally?  We have been told that we cannot have a “scholarship player.” Answer

A local charity asks donors to make contribution checks in the trade name by which the organization does business, not the legal name by which it is registered with the IRS.  The IRS does not have any record of the trade name.  Is it legal to ask for contributions this way and will the donors be able to claim a contribution deduction if they don’t use the official name? Answer

I am currently on the Board of a 501(c)(3) organization that requires each director to sign a conflict of interest statement at the first meeting but does not update the form annually?  Is an annual update a legal requirement? Answer

Can a 501 (c)(7) nonprofit private social club sell services or products to the general public at a profit used by the  Club to contain members’ dues? Answer

How can someone get a group stripped of its 501(c)(3) charity status? I am concerned about an animal shelter that does not provide basic care for the animals in its care. Answer

Are 501(c)(3)’s restricted in the number of fundraisers they can have in a year? Answer

May a nonprofit 501(c)(4) community organization refuse to admit a member because “you don’t fit in”?  The bylaws say that membership “is open to all singers, musicians, entertainers….” Answer

May our independent accountant serve as an uncompensated member of the Board of our nonprofit? Answer

Can our 501(c)(3) public charity weigh in on President Obama’s nomination of Judge Sotomayor for justice of the Supreme Court, or is that impermissible electioneering? Answer

I work for a web development company that has been donating services and hosting to a new nonprofit that has not yet received its 501(c)(3) recognition. The organization’s site currently claims they have obtained this status.  My question is twofold: 1) Is there a possibility of prosecution for our company or for the organization? 2) If exempt status is not received, can we still claim an itemized donation deduction? Answer

Is it proper to set up a 501(c)(3) scholarship fund, where scholarships will be used to send children to a specific for-profit camp?  The scholarship fund will be funded by donations, and the scholarship application process would be open to the public. Answer

I have been told by more than one "expert" that an exempt organization that changes its name must file a whole new application for exemption with the IRS. I've seen organizations implement new names as fictitious names just to avoid having to file again.  Are these “experts” correct? Answer

You state that the new Form 990 requires disclosure of the compensation of employees receiving more than $100,000. When you say compensation, are you speaking only of wages or does this include benefits? Answer

What language should be included in nonprofit bylaws to provide a plan of succession in the event that the founder of a sole member nonprofit corporation (who has exclusive authority to amend bylaws and appoint directors) dies or becomes incapacitated? Answer

If a 501 (c)(3) is considering dissolution and it "owes" money to vendors, can it award severance or bonuses to staff? Answer

What rules govern the disclosure of nonprofit salaries? I understand that, while only the top five highest paid employees must be disclosed on the Form 990, all salaries are public information and must be released if requested by a funder, whether private or government. Is this correct? Answer

I just read your question about lottery winnings over $600, where you said the winner had to pay income tax on the value of the winnings.  Does this same treatment apply to charity auction items? If I bid and win an auction item valued at more than $600 and only pay a percentage of its value, do I have to pay income tax on the difference? Answer

May a nonprofit youth sports club purchase all the equipment and uniforms from the president’s sporting goods store, and can a director run the concession stand as his own profitable business? Answer

Our charity has chosen to honor Al Gore at a banquet this fall where he will be speaking about global warming and probably promoting cap and trade legislation.  If that legislation is under consideration at the time of this event, would we be jeopardizing our 501(c)(3) public charity status? Answer

Is there a cap on what charities may pay a grant writer? Our shelter would like to pay 20% across the board for all grants obtained, regardless of the amount, but we need to make sure that is legal. Answer

Are nonprofit organizations held to higher federal standards than business corporations? Are they subject to more scrutiny from federal agencies? Answer

What court cases or IRS rulings, if any, define restricted funds?  Can an officer of a charity restrict funds by saying at a fund raiser that funds raised at the event will be used for a certain purpose, or must the donor state explicitly a restriction on the use of the funds? Answer

Can officers on a Board abstain from voting? Answer

What is the best policy to remove board members for improper conduct or otherwise not fulfilling their duties? Our bylaws unfortunately only mention that board members can be removed for 3 unexcused absences from board meetings, not for other behavior including refusal to fundraise.  We also do not have term limits.  The board member in question has been on the board for many years! Answer

Is there any precedent for a nonprofit ministry founder taking donated funds and buying property in their own personal name -- (not in the name of the charity) and then leasing it to the charity for a 99-year lease? And is this allowed by the IRS rules for 501(c) (3)? Answer

Many groups I know use their websites to solicit donations. This means they receive money coming in from other states where the 501(c)(3) group is not registered to solicit. Because much of their solicitation was done online, through newsletters, e-newsletters, or via e-mails, could they get in trouble for not registering in every state? Answer

Can our nonprofit theater company sell advertising space in our programs without jeopardizing the (c)(3) status? Answer

What is needed to make a gift restricted? Answer

Our 501(c)(3) organization was given a donation of merchandise.  The donor is claiming a deduction of $86,000. We sold it at a garage sale for $7000. Can we give the donor a receipt for the $86,000? Answer

We are a 501(c)(3) organization and have a scholarship fund. The scholarship funds reside in the scholarship savings account until it is time for payment and are then transferred to the general account that has a checkbook attached.  Is this considered commingling of funds? Answer

May the founder and board members of a nonprofit get paid a salary?
Answer

Can a 501(c)(3) entity accept directed, earmarked federal funds without losing its nonprofit status and without violating federal and state law? Answer

Our church is selling its church building and grounds.  Can the proceeds be kept and the church continue to operate out of someone's home?  What about the interest that the proceeds would earn while in the bank?  We will have about $2 million in proceeds. Answer

Our Church is considering opening an E-store on our website. If we sell merchandise under "suggested donation" with shipping and handling charges only, can we remain tax exempt? Answer

Should a board of directors consist of individuals who reside in another state? Should they be able to come to the state just to vote? Answer

Is it necessary to have a conflict of interest clause in a nonprofit's bylaws in order to file a complaint? Answer

I want to put a large sum of money I am about to receive into a nonprofit for the purpose of distributing the annual income for charitable purposes of my choosing.  I want this asset to continue protected and run by a family member after I am no longer able to run it.  What is the best vehicle to use to proceed? Answer 

A donor to our organization has offered to match gifts from other donors.  Is there anything to preclude another donor from obtaining a matching grant from his employer and asking the first donor to match both gifts? Answer

As a guideline, what is the biggest general concern to be wary of in revising 501(c)(3) bylaws? Answer

After fifteen years of dedicated volunteer service, I was dismissed from a 501(c)(3) museum without any warning, reasons or a hearing. I have no doubt that I was the victim of a vendetta, perpetrated by an immature, jealous president. A number of members are upset by what has taken place, and their efforts in my behalf have also been ignored. What can I do? Answer

When paying for services or materials, do nonprofits pay state sales tax? Answer

I want to know whether my church is in good standing with the IRS as a 501(c)(3) organization.  The pastor will not provide information on our membership, the Board meeting minutes, or our finances.  What can I do? Answer

Is it illegal for a group to claim it is a nonprofit when it has no nonprofit status?Answer

Our 501(c)(3) has had the same treasurer since 1986.  She is the only person who signs checks and is fighting adding anyone to the account.  We do not get monthly reports and there are some questions about some things, but we cannot seem to get a straight answer.  Everyone is aware of the situation but she was just reelected.  Are there federal laws governing how the money is to be handled? Answer

I'd like to make an interest-free loan to a 501(c)(3) charity.  I've heard I may be taxed on the income my loan generates for the charity.  Could this possibly be true? Answer

The new pastor of our church has driven out half of the members and all the major donors, including me.  He is now asking the members to sell the church building to fund his new video ministry.  If they do so, can those of us who gave $500,000 to reduce the mortgage in the last two years get our money back? Answer

Another member of the board of our nonprofit rape crisis center asked about the salary and benefits for the Executive Director who works 20 hours a week.   We found a 2006 Form 990 that shows it exceeds $90,000.  Is that acceptable for part time under 501(c)(3) rules?   It has slipped by over the years through blind trust on the part of board members. Answer

We are a new nonprofit that uses a fiscal sponsor for our federal 501(c)(3) status but otherwise operates independently as a registered charitable corporation in the state.  Can we get renters’ insurance if we're only incorporated at the state level, or do we need to get our own federal status to accept a lease arrangement? Answer

A 501(c)(3) charity solicited funds specifically to help victims of a flood obtain food to feed their horses. The organization distributed 1/2 to 3/4 of the $10,000 it raised to help flood victims. Can they now decide they have helped the flood victims enough (even though there are still flood victims who need assistance) and redirect the funds to something else, such as helping people who lost their jobs to feed their horses? I am one of the flood victims still needing help and they have said no. Answer

What needs to take place for a 501(c)(3) to merge with another 501(c)(3)?  Does one have to file for dissolution for all of its assets to go to the other? Answer

If a gift to a public school district or public university is fully deductible as you said in an answer to a recent question, why do so many school districts or universities create separate foundations to receive and administer gifts?  Couldn’t they just manage everything through an Advancement Office as private institutions do? Answer

My son recently went on a student trip with a nonprofit organization. We were very disappointed in the difference between what they had advertised and what they actually delivered.  We paid $2500 and did not get what they promised.  How can I report my experience to an agency that will look into this? Answer

The bylaws of a 501(c)(3) organization provide that a Director will serve 3 years.  The state nonprofit corporation law provides that unless otherwise stated, a Director will serve 1 year.  Can a Director continue to serve indefinitely after serving a 3-year term? Answer

Our 501(c)(3) organization recently received a store gift card as a donation from a donor.  How should we account for this in our income statement and balance sheet? Answer

I was denied volunteer status to work at a volunteer fire department, and they wouldn’t give me any reason for not letting me help.  Does a nonprofit organization have to give a reason for not allowing someone to volunteer? Answer

Under what circumstances should a board chair of a 501(c)(3) organization have the organization's credit card?  There are no policies regarding board spending and expense reimbursement. When traveling for the board, he books other business with his clients and expenses the board. How would the Chair report those funds on his individual tax return? Answer

Now that we have a new Administration and a new Congress in Washington, what can we expect for the nonprofit sector?  Answer

Our nonprofit secondary school has voluntarily registered under the state’s charitable solicitation registration law, even though we are exempt from such registration. We do it so that our donors will not question why we are not registered. Our Development Office does not include on our materials the legend required of other registrants stating that financial material can be obtained from the state.  Do we need to include the required paragraph even if we are not required to register? Answer

If the annual audit reveals that the income from "public" sources of a 501(c)(3) charitable organization falls to 30%, can the organization maintain its "public charity" status indefinitely by relying the 10% public "facts and circumstances" support test? Answer

I currently teach Sunday school at a 501(c)(3) organization.  In lieu of a paycheck and 1099, I would like the organization to keep my salary as a donation.  Would I be allowed to write off the value of my services (the salary I would have received) as a charitable contribution? Answer

On an annual report, should donors be listed with their donations before the net deduction or after? Answer

Our nonprofit preschool just purchased a building and the president of the board has been trying to get us to pay off the mortgage in 1/2 to 1/3 the time. Since she is a broker and will handle the details, she will make a huge commission on the $350,000 purchase price. The bylaws say that board members can not work for the preschool. Can she do this? Answer

Our 501(c)(3) high school football club is having elections soon.  The parents of one of our players are divorced.  His mother, his father, and his step-father are all running for office.  Can one family member be President and another be Treasurer? Can they all serve on the board?  The club’s constitution and bylaws are silent on the question.  More than a couple of members have raised the conflict of interest question.  Ethically, it is an easy answer, but “legally” not quite sure. Answer

Our nonprofit recently received an in depth questionnaire from a charity watchdog group that I never heard of, requesting very detailed information on the organization for “prospective donors” who may want to find out if we are a quality charity. I am reluctant to spend the time answering.  Since the organization already has a quality rating through another group, is this kind of listing really necessary? Answer

Is there anything illegal about our 501(c)(3) organization giving a Christmas bonus, or an incentive for a fundraiser that she initiated, to the Executive Director if she is already receiving a salary? Answer

A charity received a gift of $100,000 last year to fix the roof of its building.  The Board invested the gift along with its endowment while the market was going up but it’s now worth only about $70,000.  Is the Board liable to make up the difference when it starts the project shortly? Answer

I am an Assistant Treasurer of a charity and write the acknowledgement letters for contributions.  I was under the impression we were required by law to give an acknowledgement.  Is this a fact?  I thought if the contribution were under $75, no acknowledgement was necessary.  However, even if the gift is $5, I would acknowledge it. Answer

Besides cutting expenses and trying to generate more earned revenue or contributions, are there things that nonprofits ought to be doing to respond to the financial crisis that is so adversely affecting them? Answer

A nonprofit forecasting dire cash flow conditions in the late winter or early spring is considering asking a handful of board members to lend money to the organization at low interest rates and with long paybacks.  This is a contingency plan in case all other fundraising efforts and budget cutting moves fail to bear fruit in time.  Is it a conflict of interest for those directors lending the money?  Is it a wise idea? Answer

We are a nonprofit rock club that would like to sell unrelated items on eBay to increase our income and provide for increasing community services as well as member benefit. We know income derived from "unrelated" business dealings becomes taxable, but I have heard that such income derived by the efforts of volunteers (club members in this case) would not be taxable. If this is so, is there any limit on such income? Answer

Can our 501(c)(3) parent group sponsor a Forum about a school tax increase election? Our school district is sending the superintendent and a Board Member to speak and, of course, they want the vote to pass. Do we have to have someone there to speak on the negative impact? Is this legal for our group to sponsor without putting our exempt status at risk? Answer

Our 501(c)(3) often gets requests from for-profit merchants to advertise on our website. Can we sell advertising space on our website as a way of raising funds? Would there be limits as to what sort of items/services that could be advertised (obviously not political or illegal items)? Answer

When a Board approves minutes of a previous meeting with some revisions, should the organization make changes to the original minutes to reflect the revisions made at the second meeting or should it leave the previous minutes as they were and specify the revisions in the minutes of the second meeting? Does it even matter? Answer

The bylaws of a 501(c)(3) youth sports organization prohibit board pay but specifically provide that the children of board members do not have to pay the registration fees associated with each sport.

The full cost of each sport in season is about $130 so a parent board member with one child playing 3 different sports over the course of a year receives a benefit valued at approximately $390.  However there are board members with 3 kids playing 3 sports at a benefit worth over $1,000. Would this benefit be considered taxable income to these board members? Answer

Is there anything illegal or against 501(c)(3) rules to have mini-phone meetings by a few of the directors where decisions are made and one or more board members are completely excluded from the vote? Answer

If a donor makes a credit card donation to a 501(c)(3) public charity, may the charity pay the credit card fee out of the donor’s gift?  If so, what contribution deduction may the donor claim? Answer

At the last General Membership meeting of our 501(c)(3) corporation, the President arrived with 18 "surprise" general proxy documents signed by members.  The document itself was created solely by the President, with no knowledge or input from any Board Member.

When a vote was for a particular position was tight, the President whipped out his 18 proxy votes to support his preferred candidate. Our bylaws are silent on the issue of proxy votes.  Roberts Rules of Order leave all rules relating to proxy voting up to the association by-laws. Wikipedia says proxy voting is not recommended for ordinary use. The President cites our state nonprofit corporation law which says a member may vote in person or by proxy, unless the articles of incorporation or the bylaws otherwise provide.

We need to know if these 18 proxies are valid.  If we amend our bylaws to prohibit the future use of proxies, would we be in violation of our state law? Answer

Does a “consent agenda” fulfill legal obligations for nonprofit board business and adequate reporting in the organization's minutes? Answer

Is there a law that causes the word "pledge" or the phrase “in consideration of the gifts of others” on a properly signed donor commitment form to be a legally binding contract between the donor and the charity? Answer

I am the founder and president of my nonprofit organization and do not want any board to remove my authority.  My bylaws say the president shall be a member ex officio of all committees except the nominating committee. Is this a secure wording to protect my interests? Answer

I have developed a webstore for our nonprofit animal rescue group and serve as the webmaster for the website that includes the online store. I also operate a personal webstore that sells similar items. I in no way use any contacts from the nonprofit webstore to link to my website. Is this a conflict of interest? Answer

Is a nonprofit required to have a lawyer on retainer annually? Answer


I have recently opened a nonprofit Christian coffee house and worship center and obtained 501(c)(3) status. We sell coffee, muffins, bagels, etc. Many ladies from the community would like to help with this mission outreach by providing their home-baked pies and other foods. Can we treat this the same as a bake sale we have for the youth group of a church? Also can we sell soup and sandwiches at lunch for a suggested donation? Answer

The 501(c)(3) organization that my husband and I founded operates from a building  on our property. The board wishes to set up a written lease for the portion of the property the organization uses. They want to make sure that if and when we sell the property any monies that have been donated for improvements will be donated back to the organization.  Do you know if this is legal and/or possible? Answer

Is there any legal limit on the percentage a telemarketing firm can take from the contributions it solicits for a 501(c)(3) charity? Answer

Is it considered “lobbying” for federal tax purposes if a 501(c)(3) public charity seeks to influence the outcome of Resolutions at the United Nations? Answer

Is it wise for 501(c)(3) organizations to have term limits for the Board of Trustees? Answer

If a member of our 501(c)(3) nonprofit corporation demands to see all of the records of the corporation for the past two years, is there anything that says we have to give them to her?  The Board feels this is not in the best interest of the members. Answer

Our Pastor of 30 years is retiring soon and we did not provide for his retirement.  We have two funds available, one we call our future building fund and one we call a retirement fund.  However, the retirement fund has only enough money to pay the pastor for one year.  May we borrow money from the other fund to offset the difference, with intent to pay it back over 3 - 5 years? Answer

May a foreign citizen serve on the Board of Directors of a U.S. nonprofit corporation? Answer

Our church is going to dissolve and has about $10,000 in the bank. What are we supposed to do with that money? Can we give it to the pastor as a gift? Answer

Is there any legal or regulatory requirement for a charity's fundraising event(s) to turn a "profit" for the organization? Obviously there's a practical reason but is there is a regulatory one? Answer

My 15-year old son is passionate about civil rights for youth and is committed to fighting to reduce the voting age in our state to 16. He formed a nonprofit corporation and I am not sure that he should file for 501(c)(3) status.  He intends to meet with state legislators in an attempt to get a bill introduced. I am concerned that meeting with legislators might be considered lobbying and might jeopardize the group’s 501(c)(3) status. Answer

Is a nonprofit required to post all officers’ names and addresses on its website? I am worried about being exposed to stalker who has bothered me in the past. Answer

Should a nonprofit have paid staff as voting members of the board?  And, if they do, how can they avoid conflict of interest issues that may arise? Answer

Does an organization need to register under state charitable solicitation registration laws if it receives unsolicited donations, e.g., those from individuals and organizations that were not approached specifically asking for donations? In other words, how is "solicitation" defined? Answer

Our 501(c)(3) social service agency has an aging donor base.  Some of our donors who originally lived in our area have relocated to other states following retirement.  We continue to solicit and receive donations from them.  Do we need to register to solicit in those states, even though we are not soliciting from a wider population within the state? Answer

My organization has a 501(c)(3) from the state. It also has a full federal 501(c)(3) status. But when I tried to get tax-free billing for a hotel function recently, they denied it and said I need another certificate other than the one issued that declared the incorporation and the federal number ID. What is this certificate they are talking about? Answer

Should a residential neighborhood association, whose membership is established by deed restrictions but whose dues are not mandatory, establish a 501(c)(3) tax-exempt organization as a means to attract grants from state and local government, and tax-deductible contributions from businesses and private individuals, to support the operations of the association for the benefit of the community? Answer

A group of religious leaders in the same state and same denomination form a 501(c)(3) entity separate from their individual churches with one of the purposes to support - not endorse - local political candidates selected after an interview process which is open to all candidates.  Is this allowed under 501(c)(3)? Answer

If a CEO/ED is providing terrible leadership and the Board has not done the yearly evaluation required by the by-laws, is there anything an employee can do to get the Board to evaluate the CEO?  When is it possible to oust a poorly performing CEO? Answer

The director of a 501(c)(3) decides one day she wants to start her own charity and leaves, taking all the money, supplies etc, to start her own organization She uses a very similar name so she can trick people into donating to her new entity. She is now taking in donations without having her 501(c)(3) in place. Is this legal? Answer

Our nonprofit is having an election shortly for directors.  Some people rush in on election night to pay their membership dues, even though they have almost 3 months prior to the election to join.  Without it being in our by-laws, can we say "We are not accepting memberships tonight”? We have no way at the last minute of verifying eligibility. Answer

As a 509(a)(2) Private Foundation composed of WW2 veterans (diminishing membership) what are the required minimums for filing Federal tax returns?  Our income is principally from dues and interest.  Our expenses are mainly for a newsletter and postage. We have an annual reunion which also requires assessments and expenditures. Answer

If a company donates products to a public charity to sell through an auction program, what charitable contribution deduction will be available to the donor? Answer

A donor purchased $300 worth of raffle tickets and now wants a letter for a tax deduction.  What do we do? Answer

If an individual or corporation makes a contribution to a public school district, is it considered a tax-deductible charitable contribution, or must the gift be given to a separate 501(c)(3) associated with the school district? Answer

May a landlord deduct the difference between the low rental charged to a charity and the higher actual fair market rental value of property that is leased to the charity?  We searched your entire site and couldn’t find anything about a bargain lease. Answer

Is it legal to place political literature on parked cars in the church parking lot or place campaign signs on church property? Answer

A group of people did a hostile takeover of our organization, and I was removed from the board. Some board members wanted to use the groups' money to defeat the mayor who was running for reelection. Those who disagreed were removed. What can be done about this group?  Answer

Is there any requirement for a 501(c)(3) nonprofit to post its bylaws on a website for members to review and see? Answer

To whom should a charitable contribution check be made out if a nonprofit organization has not yet received its letter from the IRS recognizing its charitable exempt status—the individual who founded the organization or the organization itself? Answer

Our 501(c)(3) charitable organization received $6,000 of in-kind items, such as printing service, theatrical production service, advertisements.   Where do we show the value of these items on Form 990 under Part I (Revenue) or elsewhere in the form? Answer

Does it make logical/financial sense to acquire directors and officers insurance coverage only for select directors/officers? Answer

Does the local chapter of a national organization have to obtain its own 501(c)(3) charitable status or can it "ride" on the national's 501(c)(3) status? Answer

Following up on the question last week about the nondeductibility of a gift of use of a vacation condo, what if a restaurant is donating the food, the facility and the services to permit a charity to run a fundraising event? Is the donation of the food tax deductible? Answer

Can an employee serve on a private nonprofit corporation board of directors? Answer

I donate my vacation condo as an auction item for some of the 501(c)(3)'s with which I am involved. Frequently it goes for $2000/wk or more. More often than not, although I don't request it, I receive a letter from the charity telling me I can claim a $2000 charitable contribution deduction.  Is this correct?  Answer

We recently attended a charity function (car show) which cost $100 per person.  It was advertised as completely tax deductible.  We were treated to an open bar, food stations, free Valet Parking, and a drawing was held for leases on a new car.  Should that entire admission price be tax deductible?  I was told that it was all deductible because the event was completely underwritten. Answer

If our charity receives a cash contribution of more than $10,000 (in actual currency and not a check), must we report the receipt to the Treasury Department?  Answer

When and why should a well-established 501(c)(3) organization give consideration to establishing a separate Foundation that supports the organization?  What are the benefits and negatives of establishing a Foundation? Answer

Our new nonprofit corporation agreed to buy a property for $250,000. The seller has given us a short extension but we may not have the money to complete the deal.  We have already had the engineering and design done for the building, but we have only $400 in the bank.  We have yet to buy directors and officers insurance.  If we can’t pay the engineer and architect, will we be personally liable?  The President signed the contracts in his own name “for the X Center.” Answer

I have recently learned that a trade association claims to be nonprofit, filing a Form 990 Return of Organization Exempt From Income Tax; however, the association has never registered with the state attorney general or the charity bureau.  What steps can I take to report this fraudulent activity with the IRS and the state? Answer

I formed a nonprofit company in one state and am now getting my MFA in another state on the other side of the country. Can I "move" my nonprofit company to the new state or do I have to start a new one? Answer

Can a 501(3)(c) charity (a hospital) have a for-profit subsidiary that is taxed as a "C" Corp? Answer

Is it legal for a nonprofit Board to conduct electronic meetings or make decisions via email without actually meeting face to face? Answer

May donor-restricted funds be pledged as security for a bank loan? If not, could donor-restricted funds nevertheless be used to satisfy creditor claims if the nonprofit has no other assets? Answer

Several officers and I were recently voted off a nonprofit board for holding an “illegal” Executive Committee meeting without the “permission” or knowledge of the Executive Director. As a former secretary, I am sure we were in compliance with the bylaws.  What recourse do we have against the President, the Executive Director or the nonprofit for removing us? Answer

Does the treasurer for a nonprofit have to be a board member?"  A woman wants to donate her time to do a charity's books but doesn't want the responsibility of being the Treasurer.  At what point does she cross a line and become some kind of de facto treasurer? Answer

May a nonprofit and a for-profit have the same name, but maintain separate corporate structures, accounts and legal identity? Answer 

Does a 509(a)(1) still hold nonprofit status?  Is it able to apply for nonprofit funding? Answer 

Can a church or other charity give away a car that was given to it?  I was told no, but the church wants to give it away.  Can the church legally do it? Answer 

Can a standing committee create its own separate by-laws? Answer 

Our executive director and board president are the same person.  This president/director has recently made announcements, on behalf of the organization yet without the board's knowledge, that he is leaving his position as director.  What authority can the board call upon to rein him in and fix this mess? Answer

Is it necessary to name a Finance Committee as a standing committee in the bylaws of our nonprofit? Answer

Our 501(c)(3) school has a computer use policy that states that the email system is school property.  Is it proper for school employees or spouses to use the email system to send unsolicited emails regarding political campaign issues? Answer

Our organization is converting from for-profit to nonprofit in order to seek grants and donations for ongoing support.  Can we approach private foundations to obtain grants before being officially recognized by the IRS as a 501(c)(3) entity? Answer

We are a 501(c)(3) charity and would like to put a place for donations on our website.  Can we receive a donation from someone in another state and use it in our home area? Answer

Who should appoint the auditors for a nonprofit? Answer

As a nonprofit, do we need to change auditors every so often? If so, how often should we change? Answer

The bylaws of our nonprofit corporation, a chamber of commerce, do not specify how to remove a board member, in this case the President. We have 7 members of the Board. At a meeting, we voted 4-0 to dismiss her. We also drafted a letter for her removal that 5 directors signed and one did not. What are the rules regarding this matter? Answer

For our charity auction, a donor provided a getaway sailing weekend complete with meals, water taxi and accommodations on the sailboat. The donor also captained the boat for the trip. The trip sold for $2400. What can the donor claim as a charitable deduction? Answer

Our Chamber officers are not following the bylaws. The bylaws state that a nominating committee should be appointed and a slate of names be submitted for voting by the membership. This was not done last year. The president called individuals she and the VP felt would be good on the Board. No directors or members voted. Recently, other bylaws have been disregarded. What is your advice? Answer

Can our 501(c)(3) organization keep the list of board members confidential and refuse to make it available to the public? Answer

In one of your questions last week, you wrote about sales in which the seller says "a portion of the proceeds are to benefit" a certain charity. How would the seller give receipts to those wanting them? They'd have to say what % of their donation is going to a charity, right? Answer

We recently hired a new employee who states that a 501(c)(3) corporation has limitations on the titles that can be given to employees or created by the company. Is this true? Answer

Is it appropriate for a 501(c)(3) charity to accept money from a politician who is running for office or is holding office? Answer

May the president of a small 501(c)(3) corporation appoint her husband to be the organization's pro bono attorney to give legal advice and handle routine legal matters? Answer

I have dissolved a scholarship fund and have requested that the balance be refunded to me. The director told me that it could not be done because it would violate the rules of Section 501(c)(3). Is this correct? Answer

Can a nonprofit pay for cost of the lunch at a Board meeting with organizational funds? Answer

We are a Canadian charity with many U.S. donors who make contributions with no tax benefits. Are there any legal restrictions to the nature and/or extent of fundraising solicitations that we may carry out in the U.S.? Is there any way we can offer U.S. tax benefits to our U.S. donors without going through a U.S. 501(c)(3) fiscal agent? Answer

Can a 501(c)(3) organization provide information in its newsletter or on its website about openings on local elected boards and information about running in local elections without fear of losing its 501(c)(3) status? Answer

I was a Board member of a $5 million Educational Foundation of which my husband became President. Our marriage dissolved and he dissolved the Board. I know of an instance where he "borrowed" $50,000 from the Foundation for personal use without board knowledge or approval. Is this behavior legal? Do I have any recourse considering I'm no longer with the Foundation? Answer

Our bylaws provide that our Board Chair can vote only in the case of a tie. Isn’t that a good idea? Answer

We are a multi-state public charity with donors in many different states. We primarily solicit through mail appeals and phone work, as well as personal visits. We don’t hire outside professional solicitors, but rely on staff for the work. Do we have to register in every state in which we have donors? We are registered in the state where our office is based. Answer

I believe a nonprofit organization has been violating nonprofit law for years by having hired board members and their family members for paying jobs in the organization. To whom should I report this activity in the state and/or federal government? Answer

The board of a nonprofit arts organization voted to disband and close up shop due to financial difficulties -- much to the dismay of many in the community. Can anything be done to resurrect the organization? Answer

I have been told that a 501(c)(3) corporation needs to have insurance. What kind of insurance does a non-profit need? Answer

In a traditional nonprofit organization, what is the difference between board chair, vice-chair or board president, vice-president? Is one more correct? Answer

The founder of our nonprofit is the only person who signed the incorporation papers. A year ago, she resigned from the board at odds with the other four board members. As the sole incorporator, can she now dissolve the corporation? Answer

We are a 501(c)(6) trade association intending to establish a separate 501(c)(3) charity for scholarship activity. Can the board of directors of the 501(c)(6) serve as the board for the new organization? Answer  

Is a nonprofit organization that is not recognized as a tax-exempt charity under Section 501(c)(3) out of line when it sells ads as a sponsorship for an event and gives the business people the belief their ad is tax deductible because the event is held by a nonprofit organization?  Answer 

There were irregularities during the election of the officers of our nonprofit corporation and a new election was required. Does the incumbent president remain in office until the election is held, or is that office vacated and filled by the vice-president? Answer

The Executive Committee of our nonprofit corporation is violating one bylaw after another. Other directors are also pointing it out but nothing stops. Their conduct has cost the organization a lot of money. Should I just walk away or is there a legal way to stop them? Answer

In a recent Tax Matters item (August 1-15, 2006), you said that because of the new Pension Protection Act "Charities that now think they must provide a substantiation letter only for gifts of more than $250 will want to assure that their donors are in a position to claim the deduction for their gifts and will want to acknowledge all [cash] gifts, no matter how small." Is this an affirmative duty of the charity? Or just a nice thing to do for donors? We get a lot of $1 donations and it costs us more to receipt the donation than it's worth. Answer

As a member of the Board of Directors, I have been told that the salary of our Executive Director is protected information not available to me or the public. Is this correct? Answer

Our nonprofit has been slowly increasing the balance in the corporate bank account without any plan for how to reinvest the funds. Is there a limit to how much a nonprofit can have in a savings account or carry over without being spent from year to year? Answer

Can the Executive Director of a nonprofit corporation fire a director for not agreeing with him? Answer

We are a nonprofit youth baseball organization recognized as an exempt community organization under Section 501(c)(4). We believe that we should be a 501(c)(3) charity. Is there an advantage to changing and if so what do we do to change? Also, we cannot find our articles of incorporation. How do we obtain that information if the State does not have a copy either? Answer

Our board president bought our thrift store manager a new car and paid for it with money donated to our shelter. He also owns a printing firm which charges thousands to the shelter, yet all our documents that go out to the public say the printing is donated. What can be done to get this unethical man off of our board? Answer

Can a for-profit business owner start a nonprofit public charity? Answer

Is it possible for a 501(c)(3) nonprofit organization to go into a partnership with a for-profit business corporation on a 50-50 basis? Are there different tax issues involved? Answer

We are planning on moving our small, nonprofit theatrical production company to another state. Do we have to file for 501(c)(3) status again once we move, or is our existing status valid in any state? Answer

Can a person give money to a church and designate that it to be given to a person outside the church? Answer

Our church has finished a building campaign and some of the elders say that the gifts for the building fund can be spent on other purposes. They cite an IRS Revenue Ruling and the cy pres doctrine. Are they correct? Can I get my gift back and, if I do, will I have to declare taxable income? Answer

Our nonprofit uses a for profit fundraising group that runs a fundraiser at which people are invited to come at no cost to learn about the program. The invitation indicates that they will be asked to give a contribution and that a meal will be provided. It is usually very successful. Acknowledgements provided to the donors indicate that "no goods or services were received in exchange for the donation." Is this appropriate since the attendees did receive a meal? Does the fact that the meal is provided "for free" to all whether a donation is given or not mean that we can legally say "no goods or services were received." Answer

Is it legal for the minutes of a meeting of a nonprofit corporation’s Board of Directors to exclude ALL names so as to protect privacy? Answer

Our nonprofit organization has always made our Board meetings
open to the public. At our last meeting, things became quite disruptive
and interrupted the flow of the meeting. The next meeting we had was
not open to the public. Some members of the Board believe that this
is an illegal action. Are they right? Answer

What is required to convert a private foundation to a public charity? Answer

Our 501(c)(3) historic home museum rents out the museum for dinner parties, showers, meetings etc. Can we allow political candidates to rent the Center to use for campaigning purposes? We technically have no involvement other than the rental contract. Answer 

Is it okay for our church to send the pastor and his wife to a conference of the fellowship and pay for it all if there is no reason to send the wife? How about gifts to visiting ministers? Are these examples of payments that “inure to the benefit of an individual” that could cost the church its tax exemption?  Answer 

The Church which I Pastor left one of the major denominations last year and our 501(c)(3) was under their umbrella. Do we need to file again for that status with the IRS or are we covered? Answer

What is the fundamental difference between a "Non-Profit" ["NPO"] and a bona fide, Christian Church? Over the years, I have observed even lawyers refer to churches as "Non-Profits" or "Non-Profit Organizations". Sounds to me like an oxymoronic, impossible, mutually exclusive concept. But, I am not a lawyer. Answer

Where Articles filed more than 35 years ago say the membership shall consist of the incorporators but the Bylaws are silent about member voting rights and no member meetings (or vote) have ever occurred, do the members that still survive have the right to vote on a fundamental corporate change after Board approval? Answer

Our nonprofit softball team is dissolving after less than a year in existence. We have some money left over from sponsorships that we solicited but did not use. Some of the parents want us to distribute the money to them since they paid the players’ fees. We were thinking of transferring the money to another team and might merge. What should we do? Answer

Would it be proper to complain to the IRS if a nonprofit engages in an active lobbying effort? This nonprofit has a 501(c)(3) status. It has come to my attention that a nonprofit must have a 501(c)(4) status in order to lobby. Answer

Can a nonprofit organization maintain the right to refuse membership to anyone it chooses? The bylaws say it can, but isn’t that susceptible to bias and discrimination? Answer

Why is proxy voting different for nonprofits? Shareholders of a business can vote by proxy, but directors of a nonprofit can’t. Is there any explanation for this? Answer

Our articles of incorporation state that our 501(c)(3) religious nonprofit cannot own stock. Is there any way we can change the articles or adopt a new policy on investing? Answer

If I want to pay for a service to a 501(c)(3) organization, do I get a personal tax benefit or write-off for paying the cost of that service? Answer

Can a pastor discuss politics from the pulpit? If so, how far can he/she go. Can a pastor have political events at his home as a private citizen? Answer

Can you borrow from "designated funds" to pay other bills, and then replace the funds later? Answer

What is the difference between public charities, private foundations, and donor advised funds? Answer

Are we required to renew our nonprofit (501(c)(3)) status? With the state? With the IRS? Answer

We are a small 501(c)(3) theatre group. All of our board members serve without pay. Our annual budget is $10,000 to $15,000. Some of our members have substantial property. Do we need board insurance?  Answer  

Our nonprofit committee has worked under the auspices of our city government, which covers all our functions under its insurance. If we become a separate 501(c)(3) organization, will we be liable for accidents or can we still remain under the city’s insurance? Answer 

Our 501(c)(6) business association has taken on a local charitable cause. Can we form a wholly owned subsidiary that obtains 501(c)(3) status in order to solicit charitable grants and contributions?  Answer 

I asked a 501(c)(3) organization for a balance sheet and financial statement, over 4 months ago and they have not responded. Do they have a time limit as to when they need to respond?  Answer  

Is it okay to claim and advertise that you are a nonprofit organization to your consumers and clientele before filling a 501(c)(3) application for recognition of exemption?  Answer 

I would like to know if 501(c)(3) organizations must charge tax on merchandise SOLD. I understand that they do not pay tax on merchandise purchased. Answer

Our Executive Director would like to supplement our publishing dollars by selling ads. I have been told by our grant writer that we cannot do this because the income would be treated in a different manner than the grants we are funded with. Answer

Can a charity participate in a referendum on gentrification? Answer 

Are officers of a nonprofit corporation required to give a written copy of the by-laws to each of the members or is it sufficient to allow members to read the rules in an open meeting.  Answer 

Our charity currently uses PayPal to processes credit card payments for donations. We ask anyone who uses this payment option to include an extra amount to cover the transaction fees that the site charges. Is the total amount tax deductible to the donor? (i.e. if I donated $508, $500 to the organization, $8 for transaction fees, is the entire $508 tax deductible or just the $500 that goes to the organization?) Answer

Can a U.S. corporation whose main objective is to fund a religious orphanage/school in a foreign country get 501(c)(3) status and collect donations from American donors that are tax deductible to the American donor? Answer

I have started a nonprofit organization and would like to file an IRS 501(c)(3) application. I need to have this status within the shortest possible time. Please let me know how long it might take.  Answer

I am wanting to start a nonprofit 501(c). Could you please give me some information on the first steps in starting? Answer

We have received a request from a for-profit organization for a membership list from our 501(c)(3) charity. We have always guarded this list against use for any purpose other than our stated mission and have not divulged it. I am greatly concerned that this membership list will be used to solicit business for the companies that are requesting it. Are we required to provide them our membership list? Answer

If we change our nonprofit mission statement and bylaws with minor word phrases, whom do we legally have to notify? Or do we just keep the new version which was approved by the board of trustees at our national office? Answer

Our school is a 501(c)(3). If we have a parent organization that raises funds for our school, should it have its own EIN for its checking account or use ours? Answer

Can the founder of a 501(c)(3) nonprofit, who does not hold a board position, be voted out of the organization by board members? And if so, what protection does that founder have to safeguard that which he or she has founded? Answer

Our Church is a 501(c) (3) which has a Camp with about 30 cabins where we spend about 10 days a year for Church services. Many parties are interested in renting our facilities. Would such rentals affect our status with the IRS and cause us to be subject to local real estate taxes? Answer

Can a for-profit have a nonprofit subsidiary? Answer

I am a volunteer. A grateful patient gave me a personal gift worth about $200. Is the gift considered compensation for my work? Answer

I requested a copy of the budget from a 501(c)(3) children’s home that I contribute to. I was told it is not their policy to provide budgets. Aren’t they required to? Answer

I am the treasurer of a 501(c)(3) community center. We are thinking of closing the Center. What happens to the exempt status? Does it also cease? Can it be held in the hope of reopening the Center, or can it be transferred to another entity? Answer

Is it a problem to pay for alcohol as part of a Board meal with 501(c)(3) funds? Answer

Our nonprofit corporation is now 10 years old. We have always had just the 4 officers and members. As we are growing, we would like to start a voting board along with the officers. How do we go about doing this? Answer

If funds are stolen from a 501(c)(3) charity, does the Board have an obligation to report it to the police if the funds are returned? Answer

Where can I find information on how to take a company back to a for-profit organization? The company was started as a for-profit for the first 5 years and then turned into a nonprofit for 4 years. The owner wants to sell it but first needs to make it into a for-profit again? Answer

My wife and I have a private family foundation. We work with at risk inner city kids for educational tutoring. Can we become a public charity or create a public charity with just the two of us as trustees? Answer

Is there a legal method for a group of “affiliated” 501(c)(3) organizations to join under one holding company so they are legally tied together? They are now affiliated by some common board membership and shared services. Answer

Is there a law that says churches are exempt from disclosing their finances and salaries? Answer

Can a tax deduction be taken for 2005 even though the commitment and the gift were made in 2006? Answer

Our 501(c)(3) is holding a retreat for families of individuals with a certain disease. A family with a vacation rental is willing to donate the home for the retreat if they can have a charitable contribution deduction. Will they be able to claim a deduction if they provide the house? Answer

Can two independent 501(c)(3) organizations merge? Answer

Can our 501(c)(3) accept a donation to be used by an individual member for her expenses or must it be used for the entire membership to be deductible? Answer

I am doing volunteer work for a 501(c)(3) organization that says only paid “members” can see the bylaws and charter. I thought these had to be available to the general public upon request, but maybe I was confusing it with the tax return. Please advise. Answer

How secure is a donor’s life annuity under a 501(c)(3) charity giving plan?
Does the Government offer any guarantee if the plan operator falters? Answer

Twice a year our 501(c)(3) charity publishes a newsletter for which we charge recipients. Is it illegal to give the newsletter (for free) to individuals who donate to our organization with the understanding that they will claim their donation as a tax deduction? Answer

If a requirement for a grant is to be a nonprofit organization with the 501(c)(3) exemption and my foundation status classification is 509(a)(1), does that mean I am not eligible for the grant? Answer

At the last election of officers, the members voted for officers for terms of two years. Before the next election, the Board extended the terms for another year. The bylaws used to require that any changes had to be approved by the members, but the Board changed the rule so they can make changes without notice or approval from the members. Are there any IRS rules that vest power in the members? Answer

Did you ever hear of a law that says a 501(c)(3) organization cannot conduct an auction of any kind? Answer

Can a husband and wife be members of the board of directors? And can a member of the Board be a paid employee of the corporation? Answer

Is it true that the Katrina tax relief bill, which provides that donors may deduct up to 100% of their income this year, does not apply to gifts to supporting organizations or donor advised funds? Answer

We would like to start a Foundation in honor of our mother who gave her life to volunteer causes. The Foundation would support some of her favorite charities. How should we go about it? Answer

Is it illegal for a charity to use money allocated to a building fund for general operating purposes? Answer

Can a nonprofit corporation that has no members (according to its articles of incorporation and bylaws) charge “membership dues” as a fundraising activity? Answer

The deed to our church contains a reverter clause stating that the property will revert to the grantor if the property is no longer used for religious purposes. Since the church is a nonprofit corporation, is that clause still enforceable? Answer

Our 501 (c)(3) corporation has an endowment fund. Is there, by law, a requirement that a certain percentage of the interest be spend annually? Answer

Our 501 (c)(3) corporation is considering making a contribution to a hurricane relief fund. Is it legal for a 501 (c)(3) corporation to make such donations to another charity? Answer

Our 501 (c)(3) corporation is banned from engaging in political activity, but we are considering ways to help hurricane victims and thought one way we could be helpful is to contact our representatives in Congress to ask them to provide funds to aid governmental relief efforts. Are we allowed to do so? Answer

How do you find out if an organization has 501 (c)(3) status in your state or another state? Answer

Is there a statute prohibiting convicted felons from serving on a 501 (c)(3) corporation board? Answer

We have a nonprofit organization with an executive board and a general board. One member of the executive board shares information of the executive board meetings with a general board member. Do we have grounds to remove this person from the position? Answer

I understand that a foundation cannot make a grant to a nonprofit, where the grant is more than half of the agency's budget. For example, if a nonprofit's annual operating budget is $100,000, a foundation cannot make a grant of $51,000, the theory being that it may be able to exert undue influence and "tip" the agency to do the foundation's bidding. Is this true? Answer

Is it legal to charge a percentage of gross income from fundraising as salary instead of a base salary? Answer

I would like to start a nonprofit organization for the spreading and teaching of the arabic language.  A foundation overseas for spreading the Arabic language makes books that I would like to sell in order to generate income to support my cause.  Also I would like to open institutes for teaching the language also for a fee.  Would I be able to file for a non-profit status on these conditions? Answer

Are meeting minutes, which are distributed, read and approved by vote of both the Executive Board and the General membership, a legal document? Are they up for any interpretation if something is called into question and those that did not agree with what was reflected in the minutes say that was not they intended so they aren't going to do it as set forth in the minutes? Answer

Our nonprofit has two boards: a foundation and exceutive board. Some members are on both boards & actually influence both boards, irrespective of bylaws. Is this practice legal and acceptable? Answer

Our theater company just became a 501(c)(3).  Some of the members only want members on the board, but others believe the board should have "outsiders" who are "disinterested" parties.  No one gets paid, but we believe members are somewhat "interested" and therefore a board with members only will not be acceptable for public funding. What do you think? Answer

We have a home owners association that has filed only State requirments and received the exemption but have never filed for federal exemption. Is this organization valid? Answer

Can I open a nonprofit but not be tax exempt? Answer

A friend and I were asked last year to open and run a food pantry by a lady who has a food pantry in another county. We have been running it under her and her 501(c)(3). She has told us she wants to close her food pantry and we must close ours. How do we continue running our pantry and get a 501c3 status of our own? We would now like to continue under the name of her organization. Answer

Can a 501(c)(3) take a sabbatical as an organization to regroup? Answer

Some grant funding mentions 501(c)(3) status and we are a clinic that is part of a law school.  Do we need to apply for 501(c)(3) status in order to get grant funding?  Does the educational institution status of the law school count? Answer

I think the organization I just took over is 501(c)(3) but I can't find a certificate or anything in the materials handed down to me from last year's president. How might I go about obtaining a certificate? Answer

I would like to use an online store to sell items for a profit so that we may raise funds. Should I be concerned about tax problems connected to our income? Answer

I am currently working for a 501 (c) (3) organization and we are looking to replicate the model in other sites. Will the 501 (c) (3) status carry over to the replicated organization or will papers need to filed again? Answer

Does the Fair Labor Standards Act (FLSA) apply to a 501(c)(3)? Answer

A group of us located in Maryland are looking into starting a Church. I am a little confused as to whether or not the Church can be an LLC if in the future it may become 501(c)(3). Answer

We have sent our child to ABC Christian school. At the beginning of the year, the "President" of the school board told us that the host XYZ church which contributed funds to the school would be reducing its contribution 20% per year and that we (THE ABC SCHOOL) had to stand on our own two feet within the next several years. As a result, parents doubled their charitable donations and many of us gave thousands in goods, cash and services way beyond the tuition payment. The school hosts an annual big fund raiser and at the conclusion of the fund raiser, the hosting xyz church board closes down the school and keeps the money. On investigating the status of the school which was advertised as being separate from the church as in its own 501(c)(3) with its own board of directors, we find out that such is not the case. The school as such never existed but was actually part of the church. What can we do? Answer

What is the process for turning a for-profit company into a non-profit? Answer

I am a board member for a high school aquatics booster club and I am wondering how to go about getting replacement proof of our 501c3 filing/status for fundraising purposes. We have a tax id# but I need proof of our current tax-exempt non-profit status. Answer

I have read Nonprofit Issues articles about employee classifications (hourly, salaried-non-exempt, salaried-exempt) and reviewed info at the DOL website.  Currently all staff at our organization are classified as salaried-exempt.  I have asked the Board to review the classifications, because I don't believe everyone qualifies as exempt.  What can be done if the Board chooses not to address these issues or not to change policy?  Should I do anything? Answer

As a tax-exempt organization, we refused to show an employee/member the Form 990. It was done basically out of ignorance. We are now being told we must pay a hefty fine for each day of refusal. What is the fine for not making the Form 990 public? Answer

My daughter belongs to a dance company that has 501(c)(3) status. Each member has fundraised to go on tour to London with the company. My child has received donations from her sponsors in the amonunt of $10156, and due to the recent terrorist attacks in London, I have decided not to sent my daughter.  The Dance Company has informed me that they plan to keep my child's donated funds and put those funds towards another child.  My question is can the Dance Company use donations ear-marked for my child for another child? My child's sponsors are requesting their donations back. What can I do or how should I proceed? Answer

I recently became the president of a 501(c)(3) corporation. In the past, the Board met an hour prior to the general meeting. I prefer to have board meetings at a different time and place. I welcome non-board members to attend, but I am unsure of the exact legal obligation we have to inform membership of our meetings, how far in advance, and by what method they must be notified. Answer

Is it legal for members of the same household to have a controlling or equal share of the Board of a 501(c)(3) nonprofit organization? Answer

Is there a cost in changing the name of an established 501(c)(3) organization ? Also, what would the process be to change the name but keep the same Tax ID number? Answer

As a member of an nonprofit orginzation, can I be excluded from meetings? Answer

I have heard that there is a restriction from political involvement for 501(c)(3) organizations.  What, if anything, does this mean? Answer

I have coordinated a charitable event for the past 9 years and donated the proceeds to a local 501(c)(3). We are growing and expect to raise over $100,000 this year. I am considering filing for 501(c)(3) status for my organization. The most important question is, if I become a 501(c)(3), am I legally permitted to donate all the proceeds from my annual event to one 501(c)(3) organization or will I be forced to give to more then one organization? Answer

If my 501(c)(3) offers benefits (or small gifts) for membership/donation monies, how does that impact the amout which the donor can claim as a tax deduction for the gift? Answer

I incorporated a not-for-profit organization (religious/cultural) in January of 2004. I was the incorporator and I appointed 3 other members to the board of directors. In the beginning, the directors were not interested in running the organization because of the organization's lack of funds. I was in full control. Now, the organization owns real estate worth $400,000 and has big commitments to build a center! The other directors now are trying to reshuffle things and gain more power. I believe the other directors are steering the organization away from the objectives that I have set. Right now bylaws are non-existent. What can I do? Answer

Is it illegal for one nonprofit organization (school) to give to another nonprofit organization (another school) for a fundraiser? Answer

The youth organization that I coach at let the 501(c) number lapse. How can we reinstate with our paperwork? The officers have changed without leaving proper paperwork. We rely heavily on sponsorship, therefore, our sponsors need to be able to get tax credit. Answer

I am a member of a non-profit golf club (600+ members).  I was denied access to the finanical records, by-laws and meeting minutes.  What is the law? Answer

Some members of our 501(c)(3)women's service club have decided to drop out and form a social club among themselves. They say they do not intend to file with the IRS to become tax-exempt. However, they intend to raise funds and donate to local charities. What rules govern and/or limit them? Answer

We are a 501(c)(6) trade association. One of our members has requested we post our board of directors meeting minutes on the association's website.  We always distribute the minutes to our board but are reluctant to post them on our website for "the world" to view. Legally, what is our responsibility in regards to making minutes available? Answer

Are there laws that preclude a private (religious) association from diverting funds given by its members for a specific project (for, say, the publishing of a book, or for scholarships for students) into its general operating funds? Who should one talk to if one knows such a thing is going on? Answer

Can a for profit company set up a 501(c) organization under its umbrella? Answer

Can a 501(c)(3) nonprofit enter into a business activity in competition with previously established for-profit businesses? Answer

Can an Executive Committee of the board approve new by-laws prior to submitting them to the board for approval? Answer

I received a charity request from the "Fraternal Order of Police" who claims to be a nonprofit organization. The form states "contributions...are not tax deductable." I thought any legitimate nonprofit charity organization was tax deductable. Please explain. Answer

Are there published IRS standards for determining reasonable (acceptable) salaries for the principals of a small non-profit religious organization (2-3 employees)? Is there an acceptable level of payroll as a percentage of Gross revenue? By what measure would the IRS determine whether or not an individual's salary is excessive? Answer

We are a 501c3 that supports the education of our kid's competitive dance troupe.   When we have fundraisers and opt to disperse funds back to the members, does it have to be dispersed equally amoung members or can it be ratio'd by how much they participated in the fundraising? Answer

We are a performing arts 501(c)(3) organization that charges an audition fee for the various levels of dancers.  Parents are wanting to know if this is considered a tax deductible fee? Answer

What happens to the assets of a nonprofit corporation if it dissolves at the end of its term of existence within the articles of incorporation.  No bylaws exist to address this issue nor is it addressed in the articles.  I am told that the assets revert to the State. Can this corporation be reinstated even though its original term has lapsed? Answer

Our 501(c)(3) is interested in purchasing some land as a bargain sale where the land owner could then take a charitable deduction of the difference between sale price and fair market value.  The ministry wants to in turn sell the land to a family member who is going to build a house.  Are there any problems with this, especially in the area of selling the land to a party in interest? Answer

Does the Board of Directors of a 501(c) corporation have the right to hire an attorney to represent the corporation if one of the members of the organization will be taking legal action against the corporation for what the member percieves to be irregularities? Can the Board make the decision to hire an attorney? Does the Board have to present this issues to all members for a vote? Can the fees for this attorney be paid from the general corporate funds? Answer

I have allowed an emergency needs program seeking their own non profit status to use our 501C3 during their waiting period of application. Now they have their own non profit standing. Can they file their taxes under their new Tax ID number --  or must they file their taxes under mine. Answer

Does a nonprofit volunteer fire company need file for a 501(c) status of some kind to receive tax deductible contributions? Revised Answer

If we secure contributions from other states for our nonprofit organization, do we need to register or do anything? Our contributions are targeted to individuals seeking $200 or less per individual. Answer

Can you tell me what percentage of income a 501(c)(3) organization must spend each year to retain its charitable status? Answer

I'm a board member of a nonprofit sports club for kids. We're redoing our bylaws. We came across an entry that stated executive board members, Active members, Reserve Members shall pay an annual fee of $5. No one has done this in the last 10 years of the organization. Can we remove it or is there a reason that it's there? Answer

If we, as a grassroots mental health organization have filed for our 501(c)(3) status but have not yet been approved can we do business as a non profit and accept funding from a private corporation for services rendered during this application time? Answer

New to the Board of directors, I find that while attempts are being made towards financial accountability by a new president, older board members are stonewalling the effort. What can the new President do to force these members to comply with the non-profit laws? There are real concerns of fraud that can be substantiated. Who does the new President turn to since this half the board wants to move forward and forget about their neglect last year? Answer

If a sum of money is donated as a memorial to a nonprofit organization with a 501(c)(3) status and the money is deposited into the general fund of the organization to be used in purchasing something in the name of a deceased person as a memorial, can the monies be withdrawn from that organization and given to another nonprofit organization? Answer

I am currently in the middle of the IRS advanced determination letter process. The IRS has a hang-up because I am the only Director. There is no internal revenue code law that says there must be 3 people on a board of Directors. Do you know of any 1 person 501(c)(3)s? Answer

Will a D& O Policy help my organization? My company has failed to do the following;
1. remit taxes to the state and IRS
2. remit collected medical insurance premiums to carrier in a timely manner which has caused insurance to lapse on four occasions
3. mismanaged a government grant. Answer

What is the total allowance of monies that the President and VP can contribute into the ministry of a 501(c)(3) yearly. Also when would the IRS question the amount of donations given to other ministries, in excess of multiple ministries yearly? Answer

In nonprofit charitable organizations are secret, closed assemblies allowed? Answer

We are a group of 15 bed and breakfasts who collect dues, stage fundraisers, promote tourism, participate in community events, and contribute to needy members of our community.  We cannot seem to convince a bank to provide us a checking account without formal IRS status.  Is 501(c)(6) right for us? Answer

What is the advantages and disadvantages of becoming a 501(c)(3) verses a 501(c)(6)? Answer

Can a nonprofit hire a professional fundraiser to secure funding for special events or donations and can their fee come from a designated percentage of funds solicited and secured on behalf of the organization? Answer

By law what does a charity have to do if it receives a donated car and wants to sell it? Answer

I am the director of a nonprofit and want to rent an area of my home to the organization. Is this illegal? Answer

The treasurer of our PTO insists that we carry over at least $4000 for the next school year in case we don't have as successful a fundraiser next fall.  I think that is excessive.  Are there any laws regarding the carryover of funds?  Shouldn't we spend the money this year's classes raised on them? Answer

We have an existing 501(c)(3) organization. We are applying for another 501(c)(3) for a similar cause. Can we receive donations to the established one and hold/transfer those donated funds to the new one when we receive our advance ruling letter from IRS. If so is there a proceedure we need to follow? Answer

I am trying to find out whether our organization is recognized as a church for tax purposes. Is there any other category under which we could be exempt. Answer

I belong to a 501(c)(3) organization, that is a Food Pantry, but also, gives out money for help with utilities and rent. Every year they are holding back at least 40,000 dollars in the account. Is this against all rules. The primary is Food Pantry, is utilities and rent unlawful, and who do I contact for an Audit? Answer

Based on some other answers you've given, donations of labor for plumbing, electrical, etc. work are not considered revenue for our new 501(c)(3) organization. However, can those individuals claim the value of those donated services on their taxes as charitable donations? And on a related note, is it better to have them donate the materials used and have us pay for their labor, or visa-versa; or does it really matter from a tax standpoint for either us or those who donate how donations are made? ...we are starting a Homeless Services Center. Answer

How much public disclosure is required of a 501(c)(3) organization? What are the basic requirements regarding annual meetings and open membership, if any? Answer

I am forming a multi-media production/publishing entity which focuses on educational, religious, & literary themes, as well as socio-political themes, which will be offered to religious & educational institutions, as well as the public at-large. In consideration of forming as either as an LLC or a 501(c)(3), 1)Can an LLC accept charitable contributions? 2)Can a 501(c)(3) also be a 527 corp? Answer

Is there anything a nonprofit subsidiary can do to ward off a forced merger/consolidation with its nonprofit parent where the parent is the sole member of the subsidiary? Answer

I worked for a non-profit with the mission of restoring a theatre, the current board has decided they are tired and wish to possibly dissolve the corporation and abandon the project. There are over $2.5 million in private and public funds invested in this project. Also the property is privately owned with a 95 year lease with the nonprofit. If the nonprofit should disband what happens to those funds that were invested? Can the capital improvements be turned over to a for profit corporation? Answer

Our organization temporarily lost the status of the public charity with the IRS, because we did not fill out form 8374 in time. Now the form is at the IRS, but in the meantime we need to know if we can apply for the grants and accept donations from our supporters? Answer

My organization is creating a separate 501(c)(3) foundation. Bylaws of the foundation state there are no dues. The organization would like to donate part of their yearly dues to the foundation. Is this appropriate? Answer

Under New Jersey Law, are members of a nonprofit organization entitled to a listing of its members with names, addresses, phone numbers and email information? Answer

I work for a non-profit education foundation that awards grants to synagogues (primarily) and some religious schools for family education programs. Do the grantees have to renew their 501(c)(3) certification or is it a one time thing? Answer

A Board Member who has resigned has asked to continue to receive Board minutes. This person may rejoin our Board again in the future. We are a Private Foundation. Our Board Minutes often have sensitive and confidential information. Should we provide the minutes to this person? Answer

I am the president of a nonprofit football league and also a photographer. I take photographs for several teams in the league and sell copies to parents if they want them. I don't get paid by the league. I was told that I would have to either stop taking the pictures or resign my position as president because this activity is illegal. Is there such a law? Answer

When hosting an event or fundraiser and we use the phrase: "a portion of the proceeds to benefit..." are we legally obligated to state what portion is directed to the non-profit, if asked? Answer

We are in the process of updating our by-laws. Is there a specific procedure we must follow by state/federal law to do this? Answer

Can personal legal ramifications (for example, safeguarding a board member's personal assets from lawsuit) be curtailed by establishing an indemnification clause in a nonprofit's bylaws? Answer

We award grants to community based organizations for educational projects within in their communities. We would like to display photos of children engaged in these educational activities on our website. What are the legal things we need to consider? Answer

I am the co-founder of a new non-profit organization and the question has come up as to whether or not I can assume a paid position within the organization. Can a co-founder ethically become an executive director? Answer

I have a 509(a)(1) organization and would like to use an organization’s 501(c)(3) status [to obtain contributions]. Is there a group I can use as an incubator until I get a 501(c)(3) status? Answer

How can I stop my Church from withdrawing money from the “principal” of our endowment? Our church raises $100,000 a year but spends $250,000. Our pastor says we should be thankful we have the endowment for this purpose. Answer

If my city gives our charitable organization a house to use as a shelter can it be used as in-kind money? Answer

Can a charity give money to a charity created by a politician who currently holds office and is running for office? Answer

A Board on which I serve wants to have a raffle that will give away money and a car. Can you tell me what the dollar threshold is for reporting the winnings to the IRS. Must we ask for people to give their SS# in order to collect their prize? Answer

If people give money specifically designated towards a “building fund” of a church for a new sanctuary, and some of the money is used to build the pastor a new office in the OLD building by vote of the deacon board (without congregational input), is this permissible? If people contribute money specifically earmarked for a new vcr/tv setup for a Sunday school room, and it is used instead for 'general funds' purposes, is this permissible? Answer

I want to spend the rest of my life creating and directing musical choral ensembles. Is a nonprofit organization the way to go? Answer

I have been concerned about a drop in my church’s endowment from 160mm to 90mm from 2000 to 2003. It is now 100mm. The head of the investment committee is a broker. I am a Chartered Financial Analyst, my polite inquiries have not been received well... Have fiduciary boundaries been approached? What can I do? Answer

501(c)(3) versus 509(a)(1). What is the difference between these two statuses? Answer

Our synagogue wants to acquire several bank certificates of deposit for different terms. Our president and financial secretary will be the signatories. Can these signatories be changed if we elect new officers? Will there be a penalty? Answer

Thank you for the information on in-kind things. (See To the Point, June 1-15, 2004.) Just 2 weeks ago I attended a workshop given by the IRS and they told me we could not report the in-kind support we received in the way of office supplies, health insurance and liability insurance coverage for our employees, postage cost etc. Now I think they gave me the wrong information. The organization that gave us that start up support has given us a copy of their monthly accounting reports that verify what they contributed to us in 2003 well over $25,000. As of October 1, 2003 we are totally independent of the in-kind they were helping us with. It has been replaced with a direct grant and we have set up our own relationships with vendors. Answer

We are a new charity that has not received any grants or other cash donations yet, but have received in-kind services. Do we still have to file a Form 990? Answer

Is a nonprofit organization required to allow the public to sit in on its entire Board Meeting or just the part allocated for Public Comment? Answer

Can the directors of our nonprofit corporation vote by proxy? Answer

If our charity creates a limited liability company in which the charity is the sole member and a donor gives it a piece of real estate, will the donor be entitled to a charitable contribution deduction? Answer

For code of conduct and falsifying fact issues within a committee, after raising it to the chair of the Board, no resolution was achieved. Where is the next authority to report such issues? Any organization governing nonprofit organizations? Answer

How long is a nonprofit required to retain General Ledgers and other original books of financial records? If the guidelines state “in perpetuity,” what constitutes perpetuity when an organization is 100 years old? Answer

I’ve been the executive director of my organization about 20 years. We had a good year this year and my board wants to give me a one-time “achievement bonus” of a few thousand dollars. Is this okay? Answer

I am trying to find out how quilts can be donated to a museum and deducted from taxes. I need a copy of the form and an explanation if the amount is over $5000. Answer

Our small performing arts organization has no directors and officers insurance and no indemnification clause in its bylaws. When I asked about this, I was told that the state law protects us so that it is unnecessary. Is that correct? Answer

Our nonprofit sponsors a tour of musicians. Do we have to take out Social Security and taxes, or may we simply pass the honorarium along to them? Answer

How much surplus revenue can a nonprofit organization maintain in its treasury?Answer

My son belongs to a performing arts group, where there has been some highly irregular activity by chaperones, including the director, on trips. Both adults and kids have gotten drunk and much of the behavior has been unmannerly. The board knows we don’t approve, but doesn’t seem to care what we think. As parents, how do we confront the board and prevent something tragic from happening? Answer

My company assists not-for-profit organizations and I need to track down what legal percentage a not-for-profit can spend on administrative costs.Answer

Our Board of Directors is about to negotiate a new 20-year lease with our landlord. We are concerned that the Board members who are signing the lease won’t be personally liable for the lease if, worst case scenario, our organization becomes bankrupt. Answer

A friend of mine had a horrible horseback riding accident and is paralyzed from the waist down. He has no health insurance. Several of his friends are willing to raise money for his medical care and I am wondering what sort of trust, foundation or other entity should be set up so that donations could be tax deductible. Answer

Can I be held accountable if I do not agree with a board decision that is too risky and causes damage? Answer

I am a member of a nonprofit organization. The directors say they do not have to hold open meetings. Is this OK? Answer

Our nonprofit corporation has no bylaws. Are we in violation of the law? Answer

I just won a gourmet dinner for 12 in a charitable lottery. It will be prepared personally by a world famous chef in his own home. The charity says it’s worth $13,000. Isn’t that great? Answer

If a synagogue never filed for recognition of exemption under Section 501(c)(3), what would be the implication if they were operating for several years, assuming that they had no unrelated business taxable income? Answer

In your last issue you stated that a social entrepreneur can structure a nonprofit so that he or she can control it. I teach a How to Start a Nonprofit course and have stated exactly the opposite. Can you explain what you mean? Answer

In operating our small private foundation, can we give away significantly appreciated stock to meet our annual distribution requirement without recognizing capital gain subject to foundation excise taxes? Answer

I am trying to find out what the federal tax laws are regarding tipping--the maximum amount that a single foundation can give to a single organization without causing it to lose its public charity status and become a private foundation. I understand that it goes by percentage of income, but I don’t know that the percentage is. Answer

I am considering converting my business from for-profit to nonprofit. The name is trademarked in my name personally. Will I be able to keep the trademark? I don’t want to lose control after all the work I have done.Answer

You have previously suggested that a founder can control a nonprofit organization by serving as the sole member and appointing the Board. How might the IRS respond to an application for section 501(c)(3) status for a sole member corporation that will seek federal grants to carry out its mission? Answer

We have been told that the President of our Board has no vote. Says who? Answer

I have been asked to serve on the board of a local Chamber of Commerce. Should I be concerned that it does not have directors’ and officers’ insurance? Answer

Does our Parent-Teacher Association have to collect and remit state sales tax on the items we sell at the school store?Answer

May a Board member of a charitable organization be paid? Answer

May our organization accept a contribution from a political action committee? We are recognized as a public charity. Answer

Our controller says we should not record Public Service Announcements on radio or television as an in kind donation because the stations are required to give a certain number each year. What should we do? Answer

What are the pros and cons of incorporation for our church, especially as it relates to limited liability? Answer

Can you explain why we list our membership dues on the line for reporting gifts, grants and contributions on our Form 990 tax return and not on the line for membership dues and assessments? Our foundation members are wondering whether their dues are grants or administrative expenses. Answer

Do we have to disclose the names of donors listed on Schedule B when we give out our Form 990 tax return in response to a request for public inspection? Answer

The business hosting our annual fund raising dinner in its auditorium wants to deduct the rental value as a charitable contribution. Is it appropriate to do so? Answer

We include the rental income from our low income apartment house on line 6 of our Form 990 tax return under gross rents. Is that correct?

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