Funny you should mention this topic, JHB!

As I had stated in another thread, I called the IRS non-profit division after trying to decipher pages of tax laws and codes. As a 501(c)(3) we are clearly in the scope of our authority to donate to another 501c3. The IRS expert mentioned that as long as we are operating within our scope-as a
charitable organization-its perfectly legal to do so.

I only brought this up because I noticed that it was mentioned in a few posts recently that we could lose tax-exempt status if we donated to another 501c3. I have been in the PTA for 10 years and had never heard of such a thing and wanted to clarify because we have in the past and probably will in the future donate to other charities.

OKAY JHB, you asked for it, below is a copy of a sample articles of incorporation that came directly from the IRS application for 501c3 tax exempt status(i condensed it just a bit)

<blockquote>quote:</font><hr>
Sample Articles of Organization

The following are examples of a charter (Draft
A) and a declaration of trust (Draft that
contain the required information as to purposes
and powers of an organization and
disposition of its assets upon dissolution. You
should bear in mind that requirements for
these instruments may vary under applicable
state law.

Draft A

Articles of Incorporation of the under-signed,
a majority of whom are citizens of the
United States, desiring to form a Non-Profit
Corporation under the Non-Profit Corporation
Law of , do hereby certify:

First: The name of the Corporation shall
be ________________.

Second: The place in this state where the
principal office of the Corporation is to be located
is the City of _______________
, __________County.

Third: Said corporation is organized exclusively
for charitable, religious, educational,
and scientific purposes, including, for such
purposes, the making of distributions to or-ganizations
that qualify as exempt organizations
under section 501(c)(3) of the Internal
Revenue Code, or the corresponding section
of any future federal tax code.

Fourth: The names and addresses of the......<hr></blockquote>

As you can see, the IRS in their own example, has declared that contributions must be made exclusively to other 501c3's.

website for this notation Page 18 Chapter 3 Section 501(c)(3)Organizations) ftp.fedworld.gov/pub/irs-pdf/p557.pdf

So if there is anything else I left out, I'm sorry. I missed the Sopranos researching this the other night(its ok, repeats anyway). Now if I don't finish the dinner dishes and get the kids ready for bed, I am going to miss West Wing, and that would be a tragedy. (its a Rob Lowe thing)

Goodnight!

Suzi

[ 01-16-2002: Message edited by: SFilak ]</p>

Can one 501(c)(3) donate (funds) to another non-profit?

This question (really about donation of funds, not items) has raised some spirited discussion in another thread. It is something that definitely bears discussing, so I'm starting this posting devoted to this issue.

I've been reluctant to join in the fray, because I didn't have specific language/laws to cite. However, an IRS rep once told me it was fine - at least in our situation. Periodically, our Principal asks us to fund a variety of things and we transfer money to the school's "Activity Account". Sometimes it's for a specific item (for which they are paying). Our school year begins before our state's fiscal year, and new budget, so the Principal also has to keep some startup funds in this account. If the account is too lean towards the end of the year, we may supplement it. The IRS rep with whom I spoke last year, said this was fine.

I haven't noticed the IRS make any distinction about the donation of cash assets versus other assets. If this were true for cash, how could we legally donate books, computers, and other resources to our schools?

Let's share knowledge about this question. We all know the tax laws can be murky. And, we've probably all been given a very logical wrong answer by someone in authority at some point. But maybe together we can put this one to rest.

Comments? More info?

[ 01-14-2002: Message edited by: JHB ]</p>