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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118286
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I have a 501c3 non profit and also run a steri-clean business

Resolved Question:

I have a 501c3 non profit and also run a steri-clean business that cleans a lot of hoarder households and brings back items the owners do not want anymore. My question is can I sell these items without it effecting my 501c3? I have a thrift store that is very interested in buying my inventory every week if possible. The donations work two ways, one the hoarder themselves will donate the items to a charity (ours) or they dont want the items so our second company then donates the items to our charity. Now my main question i suppose is, with these items how well do they need to be inventoried? Are there audits done on this stuff? Can I just say sold a lot from x house for this much? Or does it need to be sold 15 plates and 7 spoons for x amount? I have a thrift store that currently wants to buy my warehouse full of stuff but not sure if I can legally just sell the donated items in my warehouse to them
Submitted: 7 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 7 years ago.
There is no code or statute explaining this. The 501 corp can take the donations and sell them off and use the money for the charitable purpose of the 501 corp. The inventory that is done depends upon the items. Big ticket items should be invetoried separately while items such as clothing or small household items can be invetoried as a lot and the party given a receipt for those items. The issue is record keeping and showing that the items are being donated to the 501C3 and that the money being collected by the 501c3 is being put back into the 501c3 for the charitable purpose and the money is not going to the for profit corporation.

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Customer: replied 7 years ago.
What is considered a big ticket item? Monitary value wise. Anything over $200?
Expert:  Law Educator, Esq. replied 7 years ago.
Generaly anything over $100 in value would be considered a big ticket item and those items should be listed separately.
Customer: replied 7 years ago.
Awesome thank you very much. One last question and then I can happily accept the answer. Do the household items need to be labeled as Kitchen lot or appliances lot or can it be generalized under Household Lot and that could be anything from a household. Does it need to list an amount of household items?

Or just something on the invoice when I sell it listed as

Household Items - 900
Expert:  Law Educator, Esq. replied 7 years ago.
No, you can label them household goods or small kitchen appliances or whatever you choose. Just like GoodWill and Salvation Army do on their receipts. It should list the approximate value of the items for the customer as well for their tax purposes, so they cannot just write in any number.
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