You are here

How does affiliate of national 501(c)(3) show deductibility of gifts?

Your Legal Questions Answered

How does affiliate of national 501(c)(3) show deductibility of gifts?

We are a local club affiliated with a national 501(c)(3) organization. Recently a local business would have donated bottled water for one of our events if we had a federal tax ID number. What is the solution so that in the future we can get similar donations and the donor a tax deduction?

What do you mean when you say you are “affiliated” with the national organization?  Is your club a separate entity? Or is it merely like a “chapter” that is part of the national and for which the national is ultimately responsible? If you are merely a part of the national, you should be able to use the national’s tax ID. Gifts would be deductible because they are gifts to the national and the national is recognized as 501(c)(3).

If you are a separate entity, you need your own EIN in order to open a bank account and that can be easily obtained from the IRS online if you don’t have one.  More importantly, however, for charitable contribution deduction purposes, you need your own recognition of exemption.  You might be exempt under a group exemption obtained by the national, but if you are separate and the national has not obtained a group exemption and listed you among its affiliates, you need to apply for your own.

You should be able to figure all of this out from the way you file your annual Form 990 (or 990-N) tax information return.  If you don’t file a return and are included within the national’s return, the national can confirm your exempt status and how to satisfy a donor that gifts are deductible.  If you are not included in the national’s return and haven’t filed your own for more than three years, even if you were separately recognized before, you have probably lost your exemption by failing to file. Check first with the national, and then with a local attorney or accountant familiar with nonprofit tax matters if necessary, to figure out exactly what is required.

Tuesday, July 31, 2012

Sign-up for our free weekly Q&A

Add new comment

Sign-up for our weekly Q&A; get a free report on electioneering