Can a non-profit donate to another non profit? Yes, but only in certain circumstances. Your non-profit can contribute to another organisation, but you must ensure that this is in your charity’s best interest while making sure that the donated money is used as intended.
Can a Larger Non-profit Donate to a Smaller Non Profit?
For example, a reputed and financially secure non-profit organisation in the United Kingdom can donate a portion of its funds to a smaller charity organisation in another country. However, in most cases, the goals of these two non-profits must be the same. I.e. poverty alleviation through increased child literacy. As long as the cause is common and genuine, there is no problem with one non profit donating finances or resources to a smaller non profit.
What Should the Donor Non Profit Be Aware of?
Conflict of Interest
Any person in charge of transferring given funds to another non profit shall not benefit personally (their families, friends, associates, etc.). This means the donated funds should only be utilised for non profit activities and not for any personal benefit of a donor.
No Breach of Donor Limitations
While stringent requirements are not usually associated with most donations, there is a risk. This involves some donors objecting to their money, in principle, going to another charity they did not select, regardless of how appropriate or worthwhile it is.
Misrepresentation of Donor Funds
Non profit organisations may be guilty of misrepresentation when they mislead donor non profits about the percentage of contributions applied to various business expenses, thereby vastly overstating the amount of the donations that will go to the charitable cause. All charities have some administrative costs, but some have high overhead costs that result in a relatively small percentage of the donation going to the charitable cause.
Nonprofits assist people in need, from donating clothing to helping with disaster relief. Giving to a non-profit organisation is a significant part of life. Financially stable non-profits donate to smaller non profits if their objectives are compatible. There is no wrong in cross donations between non profits as both parties are assisting humanity and making the world a better place.
Are you looking to find donors online? Get in touch with the Ideal Life Project, committed to giving back to the community through skill donors looking to find charity work. If you want to find a charity online to support by contributing your skills and time, sign up at the Ideal Life Project.