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Nonprofit Law/Project-based fundraising

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Question
Thank you for taking the time to read my question.  

I am on the board of a 501(c)(3).  We fundraise to provide support to foreign charities that do social work for orphaned children in developing countries (direct practice and policy advocacy).  As I understand it, the IRS does not normally allow us to accept money and earmark it for an organization we work with; this leads to my question.

An organization we work with is looking to launch a major project, and we would like to solicit donations by asking people to donate in support of this foreign organization's project.  We would have the other organization submit a project proposal with a funding request (or even a formal grant proposal) and we would contract with them to ensure they are accountable for their use of the money with disbursements tied to milestones.  Does the IRS allow non-profits to solicit donations supporting specific projects like this without running afoul of anti-earmarking regulations or can we only ask for donations to support "projects like..."?

Thank you.

Answer
See the IRS publication at
http://www.irs.gov/pub/irs-wd/0504031.pdf for details about
international grants to and international activities of U.S. exempt
organizations, and, especially page 3-4 about grants to foreign
organizations starting on page 3 at "Deductibility - Control
Rules".

You could not name the foreign organization in your solicitations, but you could name the country and the type of project.

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

Expertise

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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