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Nonprofit Law/Where our responsibility ends


We have formed a program called Wishes.  It is a program to encourage local families to get there Autism child out and experience different things.   The families fill out a grant form where they tell about there child and the "outing" they wish for (much like the make a wish foundation but on a local scale). Is this something we can do by providing gift certificates to the family (example at Applebee's and go to a movie at the local theater, or out to eat and stay all night at a local hotel), or do we meet the family at the place and pay on the spot.  Where does our responsibility of the use of the wish end?   Do we need a disclaimer of some sort?   We do have a form for proof of autism....what else do we need to protect our non-profit?

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Therefore, I am assuming you are referring to such an organization.

Revenue Ruling 56-304 has:
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Organizations privately established and funded as charitable foundations which are organized and actively operated to carry on one or more of the purposes specified in section 501(c)(3) of the
Internal Revenue Code of 1954, and which otherwise meet the requirements for exemption from Federal income tax are not precluded from making distributions of their funds to individuals, provided such distributions are made on a true charitable basis in furtherance of the purposes for which they are organized.

However, organizations of this character which make such distributions should maintain adequate records and case histories to show the name and address of each recipient of aid; the amount distributed to each; the purpose for which the aid was given; the manner in which the recipient was selected and the relationship, if any, between the recipient and (1) members, officers, or trustees of the organization, (2) a grantor or substantial contributor to the organization or a member of the family of either, and (3) a corporation controlled by a grantor or substantial contributor, in order that any or all  distributions made to individuals can be substantiated upon request by the Internal Revenue Service.
---End of Excerpt---

Your grants may be in the form of gift certificates. Obtaining and keeping the proof of the child's autism is a good method of satisfying most of the above record-keeping requirements.  Even if you gave funds to the child those funds would, under state law, be controlled by the parents anyway.

I don't know why you would need a disclaimer unless you are making some claims.  If you are making some claims, let me know what they are and I will then comment further. Of course, you would make a statement to the recipients that you are not claiming any affiliation with the restaurants or movie theaters and you do not warrant any use of the certificates -- they would deal with any issues directly with the retail establishments.

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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