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About Harvey Mechanic
Expertise
US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. To search my previous answers you can do a Google search:
site:allexperts.com/q/nonprofit
[with your other search terms appended].

Experience
I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.

Education/Credentials
B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude

You are here: Experts > Real Estate > Tax Planning: U.S. > Nonprofit Law > can 501(c)3 donations be used to upgrade private

Nonprofit Law - can 501(c)3 donations be used to upgrade private

Expert: Harvey Mechanic - 11/6/2009

Question
Hi I asked you a question last night, about a mentally ill person. I have another question. This is a listing on a site called Charity Vault, She lists her asset amount as being zero and the income amount being zero....Are we misunderstanding what that refers to, cause she has made a ton of improvements to her farm including siding a whole big barn, all new windows on the barn, a furnace in the barn and insulation all this has to cost near or over $25,000.00 Also, can 501(c)3 donations be used to upgrade private buildings on private property? This is what she has to be doing, as her only other form of income is her mental disability checks, and she calls all over and just blatantly asks for money (her daughter needs a fancy calculator etc.)

Contact: ******* *********
Employee Identification Number: 043730440
Ruling Date: February 2003
Deductions: Contributions are deductible
Foundation Type: Organization that normally receives no more than one-third of its support from gross investment income and unrelated business income and at the same time
more than one-third of its support from contributions, fees, and gross receipts related to exempt purposes.
Organization Type: Corporation
Latest Return Filed: December 2007
Filing Requirement: 990 - Not required to file Form 990 (income less than $25,000). No 990PF return.
Fiscal Year End Date: December
Asset Amount: $0
Income Amount: $0
Form 990 Revenue Amount: $0
Organization Type: Animal Protection and Welfare

Answer
No. A 501(c)(3) organization may not spend money generally that goes to improve private property. Inurement (benefits to insiders) is discussed by the IRS at
www.irs.gov/pub/irs-tege/eotopicc90.pdf
specifically on the bottom of page 10
"even a minimal amount of inurement can result in
disqualification for exempt status, whereas private benefit must
be substantial in order to jeopardize exempt status."

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

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