Community Corner

Ask the Lawyer: Donating to Charity

Looking to make a tax-deductible contribution to charity? Read this first.

Frances A. McElhill is a longtime Moorestown resident and Chair of the Nonprofit Law Practice at Archer & Greiner in Haddonfield, where she specializes in the law regarding tax-exempt organizations. She can be reached at fmcelhill@archerlaw.com.

Q. My neighbor asked me to give to his favorite charity. Is there any way I can find out more about this organization before writing a check?
A. There are lots of ways to access free public information on charities. First of all, you may want to check whether the organization is a New Jersey nonprofit corporation. If you go to the New Jersey Division of Revenue website, you can find out for free whether the organization has been incorporated as a New Jersey nonprofit corporation or, if incorporated in another state, has filed a certificate of authority to do business in New Jersey. Although this website now charges if you wish to see a recent annual report filed by a nonprofit corporation, this information can be helpful as it will show the officers of the corporation and the registered agent and address. Other states, such as Pennsylvania, still provide registered agent and address and officer information for free on their Department of State websites.

If you plan to take a charitable contribution deduction for your donation, you probably want to make sure the organization has been granted Section 501(c)(3) tax-exempt status from the Internal Revenue Service. You can check this by going to the IRS website and using the Exempt Organizations Select Check feature (formerly known as a Publication 78 search). Once at the Exempt Organizations Select Check page, you can conduct a search by clicking on the choice “Organizations eligible to receive tax-deductible charitable contributions.” Only Section 501(c)(3) charities which can offer charitable contribution deductions will be listed here. These charities will be labeled as “PC” (public charity), “PF” (private foundation), or “SO” (supporting organization).  For the average donor, you will want to see that the organization you want to give to is labeled as “PC” (public charity).

Please be aware lots of smaller charities lost their Section 501(c)(3) exemption in 2011, due to a change in the law in 2006, so if a smaller charity failed to file a federal tax return with the IRS for three consecutive years, their exemption was revoked. Prior to this tax law change, smaller charities with gross revenues of $25,000 or less did not have to file a federal tax return. Now all charities have to file a federal tax return, and those with gross revenues of $50,000 or less file an electronic postcard (called a Form 990-N) on the IRS website. At the Exempt Organizations Select Check feature, there is a search engine for those smaller charities who just file the Form 990-N.

Q. Where can I find out how much the organization spends on administrative expenses or fundraising expenses? How can I see who is on the board of directors?
A. Every state, including New Jersey, requires charities and charitable fundraising endeavors (e.g., “beef and beer night” to raise funds for, as an example, the family who lost their home to fire) to register with the state and file annual reports with the state on their contributions raised, administrative expenses and fundraising expenses. In New Jersey, only charities or charitable fundraising endeavors which receive no more than $10,000 in contributions, and whose fundraising is carried out only by all volunteers, or an exempted charity (e.g. a church or school), need not file a registration with the New Jersey Division of Consumer Affairs under the New Jersey Charitable Registration and Investigation Act. You can access this information by calling 1-800-242-5846 during business hours or at www.njconsumeraffairs.gov/charity/chardir.htm.

You can also look up the charity’s federal tax returns for the last three years at www.guidestar.org. Although this website asks you to register, it does not ask for personal information or require any fee. These tax returns will provide administrative and fundraising expense information, as well as information on the names of and compensation paid to officers and directors.

Others have found the website Charity Navigator helpful as it is a free nonprofit evaluative tool, which provides advisories about charities and information on administrative costs versus program expenses. One drawback is this service does not provide information on every charity and tends to focus on national charities.

DISCLAIMER: Information provided in “Ask the Lawyer” is for general informational and educational purposes only. It does not constitute legal advice, and may not be used and relied upon as a substitute for legal advice regarding a specific legal issue or problem. Transmission of the information is not intended to create, and receipt does not constitute, a lawyer-client relationship. Legal advice should be obtained from a qualified attorney licensed to practice in the jurisdiction where that legal advice is sought.


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