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Copyright 2003 - 2006
KU Department of Pediatrics.
All rights reserved.
This web site created by
John Goodwin, MD
Revised: March 29, 2006
Tax-Exempt Organizations: A Basic Understanding.
If you would like to make donations to your PRIDE organization tax-deductible, there are some very strict guidelines that you must follow.
Only donations to a recognized not-for-profit entity are tax-deductible. Such entities must be duly organized under the provisions of Section 501(c)(3) of the Internal Revenue Code. You have essentially two options:
- If your department is already a 501(c)(3) corporation (as is the case with the KU Pediatrics Department Foundation) you can organize your PRIDE program entirely within the bounds of that corporation. This is probably the easiest and safest way to go.
- Create a new not-for-profit entity under the provisions of Section 501(c)(3) specifically for your PRIDE program
The latter of these is definitely more difficult and expensive. If this is necessary, it might be possible to approach a legal firm to undertake the creation of this entity for you as their donation to the program.
In any event, you must keep clear records of all donations and what they are used for. Any donation to PRIDE should not be used to pay the salary of any individual, unless it can be established that the amount paid is not excessive and there was no easy alternative to that payment.
If in doubt, talk to your program's legal counsel.
You must provide the donor a letter documenting the tax-deductible nature of the donation. Example.