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DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Years of Experience in Business & Personal Taxes
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We are a local 50l(c)(3) ALL-VOLUNTEER Humane Society. In

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We are a local 50l(c)(3) ALL-VOLUNTEER Humane Society. In error, due to media mis-information, we have received $11K donations to the "care of puppies and dogs rescued in a puppy mill raid at Mason Creek Kennels" here in Lenoir, NC. There are 140 different donors. Our treasurer deposited all the checks. WE DID NOT INCUR ANY EXPENSES in
caring for the dogs. EVERYTHING was paid for by Maddie's Fund and Petsmart Charities. Five dogs remained locally in our county government operated animal control shelter and the remaining 271 dogs went to 8 other rescue or animal shelters throughout the region. Of course, we cannot keep this money but we are not sure what is LEGALLY the best thing to do. Could we: make one check to Maddie's Fund since they paid for the care? Cut checks to all the donors, in effect returning their money? Divvy up the money to all the shelters receiving the dogs even though the continued care for the animals has also been paid for by Maddie's Fund? Write letters to all donors asking if we could (A) re-designate funds to the local shelter for renovations - (B) keep some of it ourselves for our spay/neuter programs - or (C) forward it to the shelters? And if we do any of this, can we legally keep any of the money out for our admin expenses. Not mentioning time involved, there will be the cost of POSTAGE, STATIONERY, and CHECKS. We do not have a pro bono attorney and now, of course, I will be paying for this advice out of my pocket...but we need to be sure we are doing the right thing.

Thank you,

Donna West
Caldwell Humane Society
Board Member & Recording Secretary
Submitted: 6 years ago.
Category: Tax
Expert:  DanielleCPA replied 6 years ago.

In regards XXXXX XXXXX donor money, the best thing to do would be to contact the donors (I know there is a lot) and ask them to redesignate the funds. If the donors designated that the monies be used for a specific purpose and did not, you have a legal obligation to contact them asking them to redesignate or to return the funds. You cannot legally keep the money to pay for admin or other program expenses with donor restricted funds.


Since the money from both Maddie's Fund and Petsmart Charities are grants, verify that the money from the grants were used in accordance to the grant agreement. If the grants were specific to the Mason Creek rescued dogs and you didn't use all the funds, look in the grant agreement. It should specify how to handle unused funds. If you contact them and explain the situation, they may allow you to keep the money to help other dogs. Just be upfront and honest.

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