Not for Profit

[cpabsd]

A friend of mine's 2 1/2 year old is very sick and in need of a heart transplant. I have been asked some questions relative to fund raising and am not sure of the answers. People in the community are interested in giving donations to benefit the child. Can a tax exempt entity be set up to receive the donations? This would provide the donators with a tax deduction and provide the family with means to pay the large medical costs. What type of entity should it be - as in 501 c 3 or something else? Their is now an immediate need to have some serious fund raising. The costs in the next few months could be quite high. Any guidance would be appreciated.

Thanks!

[jainen]

>>an immediate need<<

You don't have time to get new IRS approval, which takes a year or so. Talk to the hospital's Foundation about how to structure your fundraising.

[kcjenkins]

And if you or the family have a church, talk to them about whether they can help. Many times, a church will set up a fundraiser for a child in need.

[Margaret CPA in OH]

If the church staff is knowledgeable, the fund, say the Children's Healthy Heart Fund, will be for any discretionary use by the governing body. Checks will not have an individual's name, for example, as deductible contributions cannot be for specific individuals. The church governing body can then designate the fund distribution but cannot guarantee the recipient. See earlier discussions of this topic.

[jasdlm]

Is the client's child eligible for your State's health program? There are special rules regarding transplants. If the child is eligible, it is likely to be income sensitive. In that case, you can set up a special needs trust with a corporate or professional trustee and have the donations go the that trust. No tax deduction involved.