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There are no limits on a nonprofit's ability to raise and maintain cash reserves; there are limits on how and to whom funds can be disbursed and (to a lesser ex
by HillRat 3y ago
There are no limits on a nonprofit's ability to raise and maintain cash reserves; there are limits on how and to whom funds can be disbursed and (to a lesser extent) the kinds of activities that can be used to generate funds. But a nonprofit can sit on an endlessly-growing hoard of cash if that's what they (and their donors) want to do.
- seadan83 3y agoHAHA, apparently my comment is the number 1 result from google to the question: "can a nonprofit hoard cash", and the answer quotes me from this very thread with "Non profits cannot hoard money" I believe I was likely incorrect and you are correct here @HillRat. The nuance where I was incorrect was if the nonprofit fails to properly pay taxes on unrelated activities - in which case the government can decide that entity is a for-profit entity. This link was helpful for me for that clarification: https://www.findlaw.com/smallbusiness/incorporation-and-legal-structures/non-profit-taxes-when-non-profits-make-a-profit.html https://www.findlaw.com/smallbusiness/incorporation-and-lega... I recall this being an issue for an HOA which wound up collecting more than it needed and there was concern that (A) it would be taxed & (B) nonprofit status would be lost. Paying taxes correctly is very important, but does not speak to a non-profits ability to hoard cash. My earlier comment is incorrect, I apologize for the bad information.