Nonprofit Law/501(c)(3) fees

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Question
QUESTION: Can a 501-c-3 pay a fee or commission to an individual who brokers a gift to the charity? Is there a particular statute which you can direct me to. (I have searched and searched!) Thank you, David

ANSWER: The word "brokers" is not in the codes, but it appears that you are referring to someone who has a contract with a 501(c)(3) organization to solicit funding for the organization.  Those persons are regulated by the state and, for Oregon see http://www.doj.state.or.us/charigroup/pages/howtofund.aspx

Generally the states do prohibit excessive amounts.

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.

---------- FOLLOW-UP ----------

QUESTION: actually not a contract with the charity but, my business is as a PI and I regularly come across settlements which belong to charities, plain and simple. It is real work to petition for and free up the money. I typically walk away from these cases.
What I would propose to the charity is a fee for myself after, and only after I am granted the order and have received a check on their behalf. I could take my fee prior to distributing to the charity if that helps their bookkeeping entries. Thank you.

Answer
I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Your issue is 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 can inform you that, generally, a charity may not give unreasonably high compensation to you, but, otherwise, they may contract for your personal services just as any other corporation could.  

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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