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Nonprofit Law/directing 5013C donations towards specific personal real estate


A community lake association I belong to has asked me to be on the Board.  They recently became a 5013C.  

Donations are specific to a lakefront owners property.  The member donates money to purchase aquatic herbicide treatment only for the water touching their lakefront lot (there's a map with real estate lots clearly defined) - it's very well defined.  Only the waterfront properties of members who donate are treated - the company retained to spray the herbicide skips any property that has not donated to the non-profit.

This seems in violation of general guidelines where officers and members cannot personally benefit from the fund raising.  Am I right?


As to charitable deductions, see IRS Publication 526 "Charitable
Donations"  which is available at:
on page 6 middle column under the heading "Contributions
You  Cannot Deduct" is "3. The part of a contribution from which
you receive or expect to receive a benefit"

Therefore, the 501(c)(3) organization can not give an acknowledgment of a donation.  Also, the organization should not be engaged in such solicitations and activities as it is supposed to be set up for public, not private benefit. Internal Revenue Code section 501(c)(3) which is available at:
has, in part, that the 501(c)(3) organization must be "operated
exclusively for religious, charitable ...or educational purposes
... no part of the net earnings of which  inures to the benefit of
any private shareholder or individual".

That term is defined in regulations 26 C.F.R. 1.501(a)-1(c) "The
words `private shareholder or individual' in section 501 refer to
persons having a personal and private interest in the activities of
the organization." on the right column of page 2

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


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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