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Financial Management: Frequently Asked Questions (FAQs)
At Maryland Nonprofits, we're asked a lot of different questions about a lot of different things. From nonprofit management, to finance, to board governance, to fundraising, we've spent time researching the answers to many of your questions. We are now giving you an opportunity to find the answers to some of our more frequently asked questions on our website. We have also dedicated a frequently asked questions section for our members, to view click here. Form 990 - How to Answer the NEW Question 75b? Answers here >> What do I need to know about donating a car to a nonprofit, and what should a charity know about car donation programs? Donors: In most cases if you claim a deduction more than $500, your deduction will be limited to the amount of the gross proceeds to charity from its sale of the vehicle (the great majority of donated vehicles are sold at auction) rather than the ‘bluebook’ or retail value of the vehicle. There are exceptions, depending on the subsequent use of the vehicle by the charity. The IRS has an updated document available on its web site - IRS PUB 4303 - A Donor’s Guide to Vehicle Donations – at http://www.irs.gov/pub/irs-pdf/p4303.pdf
Charities operating vehicles donation programs have expanded responsibilities under the revised federal law. New information they must obtain from donors, and reports they must provide to donors and the IRS are described in the summary on our web site mentioned above. The new IRS guide – IRS PUB 4302 – A Charity’s Guide to Vehicle Donations – is available at http://www.irs.gov/pub/irs-pdf/p4302.pdf The State of Maryland’s Motor Vehicle Administration (MVA) interprets the vehicle titling laws to require that the charity's name be filled in on the back of the title certificate and that the charity subsequently title the donated vehicle in its own name prior to reselling the vehicle. Also, Maryland law requires charities that accept three or more vehicles a year as donations to obtain a dealer’s license. A “wholesale” dealer’s license is sufficient and does not require establishing a sales or storage facility, but limits the resale of vehicles to other licensed dealers and prohibits retail sales to the public. Information on dealer licensing is available at the MVA’s web site at www.marylandmva.com/AboutMVA/Info/27100-12T.htm
What are fiscal agents? Also called Fiscal Sponsorship, organizations that are applying for their 501(c)(3) status will be interested in this topic. If you're a new organization that has not yet incorporated, but want to raise funds, you may want to use a fiscal agent. Fiscal agents are established nonprofit organizations that you may enter into an agreement with to accept funds on your behalf. The most common reason an established nonprofit organization would agree to become a fiscal agent is to help a new organization begin operations. Most likely the new start up organization is one that will be providing similar programs and services to a different population. The law considers the start up nonprofit and the established nonprofit to be one legal entity. Both can be held liable for the actions of the other. There are many sources available on finding and applying for a fiscal agent. Please follow the links below for more information. Hard copy sources for fiscal agents can be found in Maryland Nonprofits library.
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