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Nonprofit Law/Selling hot dogs as a fundraiser

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Question
I own a for-profit bookstore that is in partnership with a non-profit art gallery.  Can we host community picnics with proceeds from hot dog and soda sales going to support non-profit art gallery?

Thank you!

Mike Olson
Reading Frenzy BookShop
readingfrenzymn.com

Answer
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. Therefore, I am assuming that you are referring to the art gallery being a 501(c)(3) organization.  The principle that must be followed is that the for-profit can benefit the 501(c)(3) organization, but the 501(c)(3) organization may not, more than in an insubstantial degree, benefit the for-profit entity. An extensive discussion by the IRS of the private benefit issue
relating to 501(c)(3) organizations is found at:
http://www.irs.gov/pub/irs-tege/eotopich01.pdf


www.after-prom.org/state_charity_contacts.html
has links to the state offices that regulate charitable
organizations and charitable solicitations.

You would also need to your consider state' charitable solicitation
regulations.
http://www.ag.state.mn.us/Charities/GuideCharityLaws.asp

Many cities and counties also have registration and disclosure
statutes. Particular kinds of fundraising activities are
frequently subject to special local regulations. Food sales are also regulated.

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

Expertise

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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