You are here:

Nonprofit Law/Fiscal Sponsorship


I live in a private HOA that is non profit.We are looking for a Fiscal Sponsor to build an Arts and Crafts center and extend our Ballroom/Theater. We can raise most of the funds ourselves but need a 501-C3 to give the tax write off for our donors, and do some of the bookkeeping and funding. We were told that as long as we meet/match the 501-C3's criteria or goals it is perfectly legal even if we are not open to the public and want the money to go to the buildings we want here. Can you tell us if this meets the IRS's  standards for Fiscal Sponsorship?l

--- Start of excerpt ---
IRC 528... provides an elective exemption for certain homeowners associations that are described in IRC 528(c). This Code provision was enacted because many homeowners associations found it difficult
to meet the requirements for exemption under IRC 501(c)(4)." Homeowners Associations are not mentioned as one of the types of organizations that would qualify under 501(c)(3) - as it give private, instead of community benefits.
--- End of excerpt ---
You informed me that "we are not open to the public". Therefore, a 501(c)(3) organization may not fund such a Arts and Crafts center.

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.

Nonprofit Law

All Answers

Answers by Expert:

Ask Experts


Harvey Mechanic


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.

©2016 All rights reserved.