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Nonprofit Law/Disbursement of non-profit funds

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Question
I am helping my friend with dissolution for her nonprofit organization.  We are located in Las Vegas Nevada.  This is an organization for blind, called Blind Solutions. She was told that any monies collected must be used or distributed to other organizations for the blind in Nevada only.  Is that correct or can the remaining funds be donated to other non profits not related to the blind?  Also, she has already written checks to six blind organizations and feels she does not want to give more to any of them.  Does she have to give the money to Las Vegas organizations or can she give to others in Nevada?

Answer
I am assuming from what you wrote that she was told by a non-lawyer and non-government officer that any monies collected must be used or distributed to other organizations for the blind in Nevada only.  If that assumption is not correct, let me know what are the details.  
I am also assuming that you are referring to a Nevada Nonprofit Corporation that was organized as a 501(c)(3) organization.

As for the federal law, the Articles of Incorporation must have had the required dissolution clauses in the Articles of Incorporation and Bylaws  See page 77 of IRS publication  www.irs.gov/pub/irs-pdf/p557.pdf :
--- Start of Excerpt ---
Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so
disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.
---End of Excerpt---

She can look at her Articles of Incorporation to find the exact wording as hers might have been somewhat different.

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. Your issue is also controlled by state law and states may differ somewhat with how they would treat such issues. Even though this forum is not for such state law issues, I will direct you to http://tinyurl.com/2f5cmzt which is the Nevada Nonprofit Corporation Code.  Specifically note
http://law.justia.com/codes/nevada/2009/title-7/chapter-82/sale-of-assets-volunt
and I don't see anything there that would further restrict the IRS regulations as to distributions upon dissolution.  Also note:
http://law.justia.com/codes/nevada/2009/title-7/chapter-82/formation/82-086/
which includes all of the requirements for Articles of Incorporation and there is nothing there as to what you refer to.

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

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

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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 Harvey108@hotmail.com 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 "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

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.

Education/Credentials

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

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


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