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I volunteer with a 501(c)(3) organization at a museum in Maryland.  A local author is trying to raise funds for a book which is related to the mission of the museum.  He is attempting to publish the book through Naval Press Institute which requires that the author have $10,000 raised for publishing costs. Can the museum collect funds on behalf of the author?  Specifically, can we issue tax receipts to the donors and then give the collected funds to the author?  Would there be any liability on the museum's part for taxes?

Unless the author assigns the copyright to the Museum, neither that Museum or other 501(c)(3) organization is allowed by the IRS to collect funds for the author.  Such an activity is called "private inurement" and that is prohibited by section 501(c)(3) of the code. Internal Revenue Code section 501(c)(3) which is available at (on page 2, first column)
has, in part, that the 501(c)(3) organization must be "operated exclusively for religious, charitable ...or educational purposes ... no part of the net earnings of which inures to the benefit of any private shareholder or individual".

Even if a 501(c)(3) organization was allowed to make such a collection, donations would not be deductible to the donors and, therefore, the organization could not give acknowledgements of donations (tax receipts).  As to charitable deductions, see IRS Publication 526 "Charitable
Donations"  which is available at on page 6 where the IRS lists as not deductible "Contributions to individuals who are needy or worthy. This includes contributions to a qualified organization if you indicate that your contribution is for a specific person."

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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