Donations / Transfer of Assets a State Border

[Josh4121]

I am the founder of a 501c3 non-profit foundation (The Enduring Charity Foundation - Home), in SC.

I have been working with a non-profit consultant in NY. We are exploring two ways to partner:

1. She refers donors (individuals, for-profit businesses, or other non-profits) to our foundation. Donors donate, we write a tax-deductible receipt.

2. She refers failing, dissolving non-profits to our foundation. They liquidate their assets, transfer (donate?) them to our foundation. We establish an endowment in their name that supports the closest charity to the work they were doing.

Question: are there any State (NY) specific considerations associated with these activities?

1. Cross-state donations occur all the time, so I would assume no issue here. Donor donates, we write a tax-deductible receipt, NY is not involved.

2. I'm not as sure about cross-state transfer of assets between a failing, dissolving 501c3 and a healthy 501c3. Could this be considered a donation? Is the State (NY) involved in this action in any way?

[AFFA]

Re: Donations / Transfer of Assets a State Border

I wish to inform you that when two non profits merge, one non profit dissolves while the surviving non profit takes title to all of the assets and assumes all of the liabilities, of the non-surviving entity. Further, in a merger each organization must follow the procedures mandated under the nonprofit corporation law of its state of incorporation, as well as any specific procedures in its governing documents, provided such procedures are consistent with the nonprofit corporation statute.

AFF

[Friend In Court]

Re: Donations / Transfer of Assets a State Border

In order to cease operations, wind up the operation of a 501(c)(3) in New York State, they will have to follow the steps closely set out by the New York State Attorney General. The Charities Bureau of the New York State Department of Law under its Not For Profit Law (N-PCL).

A verified petition must be submitted to the court . There is a publication with instructions on how to dissolve a non profit corporation with assets -- www.charitiesnys.com and also one for a non profit corporation with no assets at the same site.

There are other forms available at the NY Attorney General's site www.oag..ny.us/intergov.affairs

So, in sum, your friend in NY must follow the instructions on how to dissolve the non profit before sending its assets to your non profit across state lines or else she will find herself in trouble with the State of New York and most likely the IRS as well.