For charitable non-profits, donations from individuals and other companies are an essential part of operations unless they were founded with the sort of endowment that pays constant dividends. However, even thought he IRS may have granted these organizations tax exempt status under their own 501 regulations, that doesn't mean they won't be keeping an eye out for any inconsistencies on the part of your bookkeeping.

Of course, charitable non-profits have to register with their states as corporations before they can even apply for status as a non-profit. Donations generally are put on hold during the initial phase while the IRS puts their application in line with everyone else's (unless a "rush" fee is paid to put your application in front of eyeballs immediately).

This means that the non-profit organization (or NPO) must have at least two (more often three, depending upon the state) officers and meetings at least once per year where duties are assigned and financial matters are attended to and voted on. It must also decide upon a course of action to further its charitable mission under the guidance of a chairperson or president. Non profit donations accepted during the time period between incorporation and the granting of an exempt tax ID number may still be accepted, but with certain regulations as outlined by the

Of course, non profit donations can always be accepted if the donors don't expect to get a deduction from their donations of time, money or things. This leaves a lot of room for bake sales and fun fairs, since the organization only has to make sure the proceeds are used in the manner outlined to the IRS and definitely not benefiting a member of the board either personally or professionally.

The number and type of organizations with missions approved by the IRS is truly staggering, with educational, religious and social organizations all competing for the same relatively small pool of non profit donations. Of course, the best way for such an organization to grow is to encourage now sources of charitable giving.

For instance, it was Goodwill Industries that first came up with the idea of using car donation as a way to generate operational funds. However, as automotive donation became more prevalent in the 1990s and ongoing wars sparked budget crisis in Washington, the true usefulness of many non profit donations came into question, especially when unregulated, for-profit industries were taking thick cuts off the top of vehicles entrusted to them. The same is true of household goods and clothing.

As such, IRS regulations have been very strict regarding the amount of a deduction a donor can take without confirmation of the gift from the charity itself. When items are sold for a profit to be rolled back into the non-profit, the donation of items other than cash must be accompanied by a Form 8282 that is sent to the IRS as well as a form 8283 that is sent to the donor for use with their Form 1040 filing.

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