San Diego Fundraiser Mesha Tomlinson was asked “My nonprofit is brand new, I am just starting, how can I accept money from donors?”
Before any nonprofit is established, and have their 1023 filed, any money they accept from a donor cannot be a write-off by the donor. A nonprofit in its infancy can accept donations and give a write off to the donor if they have a fiscal sponsorship by a qualified nonprofit which will carry their nonprofit exemptions until they are able to file their own 1023s and file their own taxes, the 990’s for nonprofits.
Any donation over $250 must have a letter of containment, basically a “Thank You” letter.
A startup nonprofit must understand that grants and scholarships are not available to them when they are just starting. Those will become available when the nonprofit finally does start filing taxes. The IRS wants to see a track record before the nonprofit applies.
Profits from the proceeds of a fundraiser may not be used for such things as salaries. All proceeds must go to the beneficiary of the fundraising event and cannot be used to pay overhead. All expenses must be paid before any money is collected.
There are two types of nonprofits. One operates with all volunteers and the other is a Foundation.
Mesha’s mantra is “Mistakes are what we call our experiences. Discovery is what we call our achievements.”
Read more about Mesha’s views on nonprofit fundraising by visiting