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Nonprofit Law/Benefit Dinner for an Association Dinner


Our professional association [501(c)6] wants to hold a benefit dinner for a general member (she is not on the executive board or an officer) who was injured on the job and needs help with medical and living expenses. If the association collects money for admission to the benefit and then gives all profits to the injured member, is this considered inurement? I have read that 501(c)6 organizations can not provide financial assistance to members. However, the moneys to be given to the guest of honor will be from ticket sales for this specific event only and not be coming from the dues collected for our operating expenses. Will a separate bank account, opened and managed by the association, suffice to show it is not inurement of the association's funds?

Thank you for your time.

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.  Even though this forum is not for (c)(6) organization questions, I will direct you to -- where the IRS gives general information about the 501(c)(6) classification.

Especially note the writing at which confirms what you read --  that 501(c)6 organizations can not provide financial assistance to members. Whether the funds come from dues or otherwise is not relevant. See Rev. Rul. 67251, 19672 C.B. 196:
--- Start of Excerpt ---
A business league which extends financial aid and welfare services to its members does not qualify for exemption under section 501(c)(6) of the Internal Revenue Code of 1954 since part of its net earnings is inuring to the benefit of private individuals.
---End of Excerpt---

A separation of bank accounts is not helpful.

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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