Nonprofit Law/501(c)3 gifts


May a 501(c)3 make a gift to a 501(c)4?  And if so, are there limits?  Including sister organizations?

See starting on pdf page 13 as to the
discussion of "Charitable Class"
--start of excerpt  ---
The group of individuals that may properly receive
assistance from a charitable organization is called a charitable
class. A charitable class must be large or indefinite enough that
providing aid to members of the class benefits the community as a
--end of excerpt  ---

Therefore, a 501(c)(3) organization may not gift to non-charitable beneficiaries, such as 501(c)(4) organizations.

If the gift is given to an entity that is related to the 501(c)(3) organization, then any amount could jeopardize exemption. 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

The IRS has written that one who controls is also an insider.
"The first key is that inurement applies to those who are 'inside,'
or in control, of the organization..."

Inurement (benefits to insiders) is discussed by the IRS at
(It takes a while to load the 52 page pdf file)
and specifically note, 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 -

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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