Nonprofit Law/money c3 and c6


Do the tax laws on foundations prohibit a donor to a foundation from deriving either a direct or indirect financial benefit from the activities of the foundation?  If the answer is yes, then a c6 that donates money to a c3, to get the c3 started, cannot derive any financial benefit from the c3 in the future?

Thank you.

I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations which are not private foundations. You used the work "foundation" but, as to public charities. there is no prohibition on a donor to a 501(c)(3) organization deriving either a direct or indirect financial benefit from the activities of the 501(c)(3) organization in the future.  There is a prohibition, however, on calling something a donation if something is going to be expected in return.
The IRS has written on page 1 (first column under "Introduction")
in their publication 526 "Charitable Donations", which is available
at: "A charitable contribution is
a donation or gift to, or for the use of, a qualified organization.
It is voluntary and is made without getting, or expecting to get,
anything of equal value."

That would apply to the c6 that donates money to a c3.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

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

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