Not every contribution to a charity qualifies for a charitable deduction. Charities that misunderstand the rules can lead donors astray when they offer tax receipts for non-deductible gifts inadvertently damaging donor relationships.
Donors wishing to help the victims of a tragedy, a serious illness, or other major hardship are often surprised to learn that gifts earmarked for specific individuals are not tax deductible as charitable contributions. This rule catches many donors off guard as it is not intuitive that gifts made to individuals who are clearly in need would not be considered charitable.
Most states require you to register your organization if you solicit donations from their residents. Many states also require registration if your organization collects substantial or ongoing donations from their residents, even if you aren’t specifically targeting donors in that state. Download our comprehensive list of each state’s requirements.
Download our free guide to learn about the many elements needed to run a successful nonprofit organization, as well as how to avoid common pitfalls and mistakes.