CIC Association

Serving Community Enterprise

We have a couple of people in the US wishing to make donations of around $5k to us :-)  But they would prefer to do this through a US registered 501(c) - which we are not. Does anybody have any experience of receiving donations from the US via a 501(c) organisation?

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Im not an expert on US tax law but a '501c' is a tax exemption status provided to numerous types of non profit organisation in the US.

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In simple terms it is entirely possible for your CIC to receive a donation from an overseas Company. If it were to have 501c status doesnt make a difference. There would be NO opportunity for Gift Aid in the UK as it will be from a Company not a qualifying individual.

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Perhaps the reason is the individuals concerned will receive a tax break in the US, you would probably have to find a 501c organisation which does similar work to your CIC.

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It may be that planning to send the donation to the UK via a 501c would result in the 501c org breaking the rules of qualifying for 501c status. Ie. it could be viewed as a tax dodge, im not sure if the 501c status would apply to a donation intended to go overseas to another company.

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I think you would do well to post on US 501c websites to try and get some answers, im pretty sure the generic rules will have a way you could do it.

Would a 501c in the US want to do it? I guess you'd need a good relationship and your work would need to be similar to theirs or why would they get involved.

We have Localgiving.com which allows CICs (if the activity itself is regarded as charitable) to list projects on their site and qualify for Gift Aid, so its not impossible to think there may be similar in the US where you could list as an overseas project(if that qualified) or at the very least find a few organisations that may work with you.

Could be a wild goose chase so Id advise not expecting it to work out for you, but Id be very interested in finding out how you get on and if you get any better information than I currently have.

Best of luck

agh, just scraped this wikipedia. So it's looks like a No.

A 501(c)(3) organization is allowed to conduct some or all of its charitable activities outside the United States.[45][46] Donors' contributions to a 501(c)(3) organization are tax-deductible only if the contribution is for the use of the 501(c)(3) organization, and that the 501(c)(3) organization is not merely serving as an agent or conduit of a foreign charitable organization.[47] Additional procedures are required of 501(c)(3) organizations that are private foundations.[46][48]

Thanks for all this feedback John. Yes - I think the key point is that a US registered 501c can make donations to non-US entities, provided it fits into their own charitable purpose. But not at all sure what the process is for that - as you suggest, the key point is ensuring this is for a genuine charitable purpose and not as a tax dodge. I'm pleased to know there isn't a simple and well known solution that I wasn't aware of though! I will let you know if I find out more.

Good to know about the localgiving.com site as well - thanks for that.

Once again - many thanks

Rupert

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