Nonprofit Law/Dissolving


Hello, and thanks in advance for any help that you can offer. We are 501c3 Animal Rescue located in MI and are needing to dissolve. We have some money that we want to donate to other rescues, but don't understand whether they must be also 501c3 or not?
Here is the paragraph from our articles of incorporation:

"Upon the dissolution of the organization, after paying of all of the liabilities of the corporation's assets shall be distributed for one or more exempt purposes within the meaning of IRC Sec, 501(c)(3) or to any federal, state or local government, or for any public purpose."

Thank you for your time.

You may distribute funds to a nonexempt organization but you must have legal assurance that the funds would be used for charitable, educational or religious purposes. The Michigan Nonprofit Corporation Act ("Act 162 of 1982) is available at and the sections relating to dissolution are available at and, specifically note 450.2855 that states that, upon dissolution assets may be distributed to another organization "engaged in activities furthering such [charitable, educational or religious] purposes".  Therefore, the distributee does not have to be recognized by the IRS as a 501(c)(3) organization, but must already be engaged in charitable activities.

But your proposal will need to first be approved by the Attorney General of the State:

Dissolution of Charitable Purpose Corporations, 1965 PA 169, MCL
450.251, et seq., MSA 21.290(1)et seq . provides that organizations
established to hold property for charitable purposes, except for
religious organizations, shall not be dissolved without first
giving notice to, and obtaining the consent of, the Attorney
General. The Charitable Trust Section administers this law. To
obtain consent, organizations wishing to dissolve must file with
the Charitable Trust Section a properly completed Dissolution
Questionnaire, along with all requested attachments. Once the
dissolution is approved by the Charitable Trust Section staff, a
letter will be sent to the organization stating that the Attorney
General has no objection to the dissolution.
---End of Excerpt--

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


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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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