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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
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Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Can a 501(c) non-profit org. provide a donation receipt to

Customer Question

Can a 501(c) non-profit org. provide a donation receipt to a company who provides a $1,000.00 check written in the name of the non-profit org. but specifies that the $1,000.00 should be used immediately for a little league football team expenses and wishes to receive a check for a $1,000.00 from the non-profit immediately to pay the football teams expenses? What section of the tax code covers such a transaction?
Submitted: 5 years ago.
Category: Tax
Expert:  Ed Johnson replied 5 years ago.

Dear brainwoods,

 

Can you tell me the purpose of the 501(c) organization? This will depend on the organizations purpose.

 

Corporations frequently donate money to an organizations cause, and then want to see proof that the money is used for the purpose.

 

 

Customer: replied 5 years ago.
The purose of the 501(c)(3) org. has been in the area of community service work. The org. begin operations in 1984 and had a primary focus in the area of helping the needy populations in columbus, ohio with interest such as providing all sort of services for the homeless population through its homeless shelters. Most recently, the org. has begun programs addressing ex-offender re-entry services and programs. however, the general manner of which the organization was originally set up allows for functioning as a fully tax exempt non-profit charitable organization which could involve all chariable activities within the law.
Expert:  Ed Johnson replied 5 years ago.

Dear XXXXXwoods,

 

This is referred to as a designated donation. By law you can not use it for anyother intended purpose without the approval of the donor.

 

This donation is still deductable as long as it is not designated for a particular individual.

 

The business can recieve the check from the organization for the team expenses, provided the team is managed by that company.

 

The problem you may have is if baseball teams are part of the definition in your charter of what constitutes charitable activities within the community. I am not able to address that because I do not have access to your charter.

 

If your organization is formed and received tax exempt status for taking care of the homeless, and now you are taking care of baseball teams, then that income may be viewed by the IRS as unconnected activity.

 

At the very least, the 501 board of directors should meet and amend the charter to include community based activities other than homeless.

REFERENCES: http://www.irs.gov/pub/irs-tege/eotopice85.pdf

 

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