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Nonprofit Law/required donations?

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Question
Can a "charity" require a specific donation of either money or work ( say, for a musical event), & refuse entry if you do not contribute? (I live in Virginia, should that matter..)

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. Therefore, I am assuming you are referring by "Charity" to such an organization.

The word "charity" is a general word it can refer to either charitable, religious or educational activities.  A 501(c)(3) organization may charge admission fees to its events.

--- Start of Excerpt ---
The promotion of theatrical productions can be an educational
activity.
The promotion of the arts and of culture is generally recognized as
an educational activity. See Reg. 1.501(c)(3)-1(d)(3)(ii). The
following are exempt educational activities dedicated to such
pursuits....

Promoting jazz festivals and jazz concerts...

Conducting annual festivals to provide unknown film makers with
opportunities to display their films. Rev. Rul. 75-471, 1975-2 C.B.
207....
--- End of Excerpt ---
http://goo.gl/AsF2GW (which is section 7.25.3.7.10 of the Internal
Revenue Manual.

For example, the organization cited above which was granted exemption because it promoted jazz festivals charges admission to its events. "The organization periodically conducts public jazz festivals
or concerts at which members of the public may hear true American jazz, written and played by serious students of this form of music including famous jazz musicians.  Admission fees are charged for the purpose of helping to meet expenses."
http://www.irs.gov/pub/irs-tege/rr65-271.pdf

When an organization states that it requires a minimum or specific donation for an event that is generally not considered a fully a donation for income tax purposes but is, instead, an admission fee for an event.  As to charitable deductions, see IRS Publication 526 "Charitable Donations"  which is available at http://www.irs.gov/pub/irs-pdf/p526.pdf and specifically on page 6 middle column under the heading "ContributionsYou  Cannot Deduct" is "3. The part of a contribution from which you receive or expect to receive a benefit".  An example is given:
--- Start of Excerpt ---
You  pay  $65  for  a  ticket  to  a dinner-­dance at a church. Your entire $65 pay­ment goes to the church. The ticket to the din­ner-­dance has a fair market value of $25. When you  buy  your  ticket,  you  know  its  value  is  less than  your  payment.  To  figure  the  amount  of your  charitable  contribution,  subtract  the  value of the benefit you receive ($25) from your total payment ($65). You can deduct $40 as a chari­table contribution to the church.
--- End of Excerpt ---
 
Now if the 501(c)(3) organization gives the option to do work for the event or work for the organization and will give, in exchange admission to the event, that work is considered normal taxable employment, but the organization can give that option. The IRS Publication 15-B discusses taxable fringe benefits and is available at http://www.irs.gov/pub/irs-pdf/p15b.pdf

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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