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Nonprofit Law/501c3 tax deductible assistance for member?

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QUESTION: Dear Mr Mechanic,
I belong to a vey small 501c3 church - we are maybe 150 people max.  One of our members was badly burned in a fire in an apartment building, the legal responsibility for which is as yet unknown. Meanwhile, he is injured, needing 30 days+ medical followup from several surgeries, indigent, no car, no insurance, and now unable to work for quite some time. He has reason to believe that he will be evicted for nonpayment of rent.

I read your earlier article -  
http://en.allexperts.com/q/Nonprofit-Law-2266/2010/4/501c3-donate-fundraising-pr

...but I confess my non-legal head is not fully comprehending. I am wondering if our church can provide him some funds out of our general funds to help him through this difficult time.

I did understand from your earlier article that members cannot make tax deductible donations to the church if they are stipulating they are for this gentleman.  

Are there other specific concerns we should address carefully in order for our church and our members (both givers & receiverhignh) to honor the requirements for tax-deductible donations?

ANSWER: See http://www.irs.gov/pub/irs-pdf/p3833.pdf starting on pdf page 13 as to the discussion of "Charitable Class"
--start of excerpt  ---
The group of individuals that may properly receive assistance from a charitable organization is called a charitable class. A charitable class must be large or indefinite enough that providing aid to members of the class benefits the community as a whole.
--end of excerpt  ---

As church benevolence funds generally go only to members of a small congregation and not to members of the community as a whole, the church's activity of giving funds to its congregation, jeopardizes
its exempt status.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.


---------- FOLLOW-UP ----------

QUESTION: So if the "class" to benefit is defined as "people suffering loss or injury in the fire at XYZ street on X date", (presuming there were others who suffered, fwbo4who are NOT of our church), would that qualify?

Answer
No. Sorry. Your definition is way too limiting because the class is not sufficiently large.  The class could, though be those persons in the community who are in need of basics, like food, clothing, and/or shelter.

--- Start of excerpt ---
the class of persons to be benefited may be so limited that the [activity] is not charitable even though the purpose of the [activity] is to relieve their poverty, to educate them, or to save their souls, or to promote their health
-- End of excerpt ---
https://goo.gl/GCKaQG (on page 5).

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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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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