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Nonprofit Law/501(c)7 Working With 501(c)3


I recently formed a 501(c)7 cycling club that intends to select a 501(c)3 local charity to partner with.   As part of the cost of membership in the club, I would like to have a mandatory amount that goes directly to our partner 501(c)3.   Our website can actually handle having the amount separate and collected in a standalone account in Quickbooks.

My question is if I can get the partner 501(c)3 to issue a tax receipt for the amount they donated through our club, can the member take that part of their membership dues as tax deductible?

Thanks in advance!

The IRS has written on page 1 (first column under "Introduction") in their publication 526 "Charitable Donations", which is available at: "A charitable contribution is
a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value." That conclusion is supported by  Singer Co. v. United States, 449 F.2d 413, 418, 196 Ct.Cl. 90 (1971), citing to a House Report

You wrote that your (c)(7) was donating a certain percentage of its receipts from memberships to a 501(c)(3) organization.  The donation is from your organization and may not be used, in any part by individual members of your club, at least because the donations are not done voluntarily by each individual.

The IRS explained:
--- Start of Excerpt ---
A charitable contribution must be made voluntarily and with donative intent. U.S. v. American Bar Endowment, 477 U.S. 105 (1986). In American Bar Endowment, a membership organization maintained a group insurance program for its members. As a condition of participating in the insurance program, members were required to assign refunds from their premiums to the organization. Every year, a portion of the insurance premiums paid by members was refunded to the organization. The organization used these refunds
to fund charitable grants. Members participating in the group insurance program claimed charitable contribution deductions under §170 for their pro-rata shares of the refund amounts that funded
charitable activities. The Supreme Court concluded that there was no voluntary payment of money or property. The Court suggested that it would have reached a different result if the organization were
to give each member a choice between retaining his pro-rata share of dividends or assigning them to the organization.
--- End of Excerpt --- (page 3).

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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