QUESTION
Is it legal to accept donations if you are not a non-profit?
Asked on Dec 01st, 2014 on Business Law - New York
More details to this question:
I am wondering if it is legal to accept donations to further a cause, if you are not a registered non-profit organization. For example, I see children on television who collect monetary donations and use it to purchase goods for homeless shelters or other worthy causes. Some children raise thousands of dollars. I'm just assuming these children are not directors of non-profit organizations. Is it legal to accept donations if you are not a non-profit?
1 ANSWER
There's nothing illegal about accepting gifts. It's just that the tax consequences, particularly to the donor, are different if he/she gives money to a registered charity as opposed to a homeless person on the street. The first may be tax deductible; the second is not. Moreover, in the situation you described, the donations are going to a non-profit; if I give money to a child collecting funds for the United Way, I have given the donation to the United Way (and should get a receipt from it), not the child.
Answered on Dec 02nd, 2014 at 10:04 AM