Donate to an individual, receive a tax-deduction?
May 5, 2011 8:44 AM   Subscribe

How can a family who's child has Leukemia collect money, and give tax deductions to donors?

They live in Northern Virginia. They asked the Leukemia Society and other nonprofits to see if they would act as a fundraising arm for the family, but so far with no luck. Any ideas of a nonprofit that works to raise money for families struggling with this?

Alternatively, how can an individual receive tax-deductible donations?
posted by punkbitch to Grab Bag (11 answers total)
From what I understand, in order for a donation to be tax deductible, it has to go to a registered charity. Wikipedia has some more information. I'm certainly no expert, but from that article it doesn't look like donations to an individual would qualify, as it wouldn't necessarily "benefit the public interest".
posted by torisaur at 8:53 AM on May 5, 2011

They would need to register a charity that's sole purpose was to 'fund the publics leukemia costs'.. but I really doubt that it would be possible to do.
posted by mary8nne at 8:55 AM on May 5, 2011

I don't have any recommendations in terms of non-profits to seek out, but I can definitively note that IRS publication 526 clearly notes that donations to individuals are not tax deductible.

It's a lousy situation, but I also think you are going to have a very hard time finding a charity that will act as a fundraising arm for this- there's a lot of close scrutiny on donations and expenditures and allocations of resources within non-profit accounting that makes this sort of arrangement incredibly labor intensive and difficult to justify, and may well be specifically prohibited in their bylaws.
posted by Zophi at 8:56 AM on May 5, 2011

There's some good information about starting a charitable organization here. You need to incorporate, from what I can tell using Form SCC819 (source). You will probably be applying for 501(c)(3) status, and from what information I can find online it seems you also need to register with the IRS as a non-profit organization.

I don't know what the requirements are for a charitable organization, but I imagine you'd want to widen the organization's goals beyond this one child's medical costs.

I'm not a lawyer or any kind of law professional, and if you take this as legal advice you should also probably come talk to me about a bridge in Brooklyn that I can get you a great deal on.

I would suggest contacting an attorney, maybe calling around to some local firms to see if they'd do something like this for you pro bono. If they're near a university, they could also try calling a legal clinic and see if they'd have someone who could help with this sort of thing.
posted by brina at 9:01 AM on May 5, 2011

how can an individual receive tax-deductible donations

They probably can't. By definition, a nonprofit organization cannot have activities that have a 'private benefit' - that is, "[N]o part of the net earnings of [the exempt organization] inures to the benefit of any private shareholder or individual . . . ." So you could set up a charity whose purpose was to pay for the care for any child (or even a class of children, say all the kids who live in one community) with a specific medical need, but you can't set up one to benefit only a single child. (This is why the Leukemia Society and others won't get involved - doing so would jeopardize their 501(c)(3) status.) Setting up a 501(c)(3) is complex, and time-consuming, and would require legal help.

It may be possible to set up some kind of medical trust that could so something like that (similar to the way that contributions to 529 college savings plans by family members can be tax deductible), but you'd want to talk to a Trusts Lawyer about that.

All that being said, you're kind of barking up the wrong tree here.

Avenues to pursue:
- Is the family eligible for State or Federal medical care programs (Medicaid, whatever your state's version of SCHIP is?)
- In New England, the Jimmy Fund is the charitable arm of the Dana-Farber Cancer institute, and they'd cover or help cover the costs associated with treatment. Whatever the main cancer research center is near you will likely have a similar program. Here is a list of the Children's Oncology Group accredited hospitals in VA. Were it me, I would start with the University of Virginia, simply because they are public and nonprofit.
- The Shriner's do free medical care for children with a variety of classes of illness, although I don't think cancer is one of them. However, contacting your local Masonic/Shriner's chapter and asking if they know of recommendations for a similar charity couldn't hurt, since I suspect they get this question frequently.

Finally, I can't imagine any reputable center denying care because of a family's inability to pay. The family may go heavily into debt, and they may end up paying $5 a week for the rest of their lives, but virtually any hospital billing office will be willing to work with you to negotiate fees and set up a payment plan the family can afford.

Best of luck to you, this child, and the family.
posted by anastasiav at 9:19 AM on May 5, 2011

One more thing: CancerCare seems to be a charity devoted to assisting people with cancer. They do offer grants to families to help with costs of care or insurance copayments. They also have a tips for finding assistance page. They have a three-star Charity Navigator rating and seem to be well-regarded generally. I'd strongly advise you to contact them for assistance.
posted by anastasiav at 9:24 AM on May 5, 2011

Alternatively, how can an individual receive tax-deductible donations?

They cannot. And further, I promise you that a family who is dealing with pediatric cancer really should not take on the hassle and headache of forming a 501(c)3 charity, which requires many administrative and legal steps.

But they can collect donations. It just won't be tax-deductible. Consider helping them set up a free website at CaringBridge, and put a PayPal link on the site.

Believe it or not, tax deductibility is really not the primary motivator for people that would give to a family in need with a sick child. They will give because they want to and they can, not because they can write it off. Just set up a site, make your plea, tell the story, and people will give what they can.

You might also search for an org in NoVa that is similar to Heroes For Children here in Dallas... they assist families in exactly this situation, with expenses and other support. You might call HFC here and ask them if they know of a similar charity in your area.

I'm sorry for your friend's family, and wish them strength.
posted by pineapple at 9:24 AM on May 5, 2011 [2 favorites]

Theoretically someone could set up a 501(c)3 like DonorsChoose for medical donations, where individual people could set up a grant which would be crowdfunded through tax-deductible donations. I don't think that such an organization exists yet though.
posted by burnmp3s at 9:33 AM on May 5, 2011

What about posting their needs on modestneeds and directing their benefectors to their listing? There's obviously a limit to how much can be collected this way, and I think modest needs generally pays the bills directly, so you can't use it to get liquid cash.

Other than that, yeah, they should apply for assistance from real existing charities that deal with relevant things, and their various well-wishers can donatet here if they choose, but there won't be any direct relation between the donations and what they receive.
posted by If only I had a penguin... at 10:05 AM on May 5, 2011

You can very likely find a local NPO agency to help you do this. Ask them to administer payments that come in and issue tax receipts as necessary, then the agency may cut a check on your behalf to whatever given provider.

Our center did this recently for a young girl for whom hyperbaric treatments were extremely beneficial (but not a recognized treatment for her condition and thus declined by her insurance provider). Her parents put on fund raisers, had a fancy elimination dinner and auction and whatnot, and we took the larger checks and then made payments on her behalf.

We are a large organization and this passed muster with our lawyers and auditors before we agreed to it, although I don't know the details. I could find out if you need to memail me.
posted by TomMelee at 10:20 AM on May 5, 2011

There arej organizations that do this for some people.
Example: NTF could be useful if the child needs a bone marrow transplant
posted by SLC Mom at 1:38 PM on May 5, 2011

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