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Commingling funds from a 501(c)(3) and 501(c)(7)

Your Legal Questions Answered

Commingling funds from a 501(c)(3) and 501(c)(7)

I am a board member of a 501(c)(3) charitable nonprofit wholly controlled by a 501(c)(7) tax-exempt social club. We are concerned about the issue of commingling funds. What are the key points for us to keep in mind?

Three words: Don’t do it.

Very different tax requirements apply to the two types of tax-exempt entities, and you could easily jeopardize either or both exemptions by making wrong allocations.

Wednesday, September 28, 2011

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