Legal Question in Business Law in New Jersey

accepting donations if you are not a charity

Largely I want to do this for the humor/commentary involved, but if it's legal, I could acturally use the tuition help:

I am putting togther an internet business site for some of my art. I was toying with the idea of adding a page that involves the ''feed a starving college student'' donation button, where is will be explained very explicitly that

1) it is not a real charity

2) the donation is not tax deductable

3) any money actually collecetd will go to the tuition living expenses of the page owner (me) who just happens to be a poor graduate student

Are there any legal concerns or prohibitions about me setting up such a donation mechanism on my site?

Thanks


Asked on 12/31/06, 10:31 am

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

Re: accepting donations if you are not a charity

There are always concerns when money is involved. There are no special issues with your proposals provided that your contributors are fully informed that they are not getting anything for their contributions, not even a tax deduction.

Your primary concern should be how to handle private data. If you give out an address and simply accept checks by mail, there should not be any problem. However, if you are using a credit card interface of any kind, you will inevitably come into contact with a variety of sensitive data that must be protected. Also, even if you provide the appropriate protection, it is wholly within the realm of possibility that you might become the subject of an official investigation or a private suit based on your use of that data. Just because you didn't do anything wrong doesn't mean that you can't be sued.

My best advice is that, if you think that there is something to be gained for you, form a limited liability company to accept donations and take out some business general liability insurance that would cover you. If it isn't worth the minor trouble and expense of doing that, it is probably more potential trouble than it is worth.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 1/01/07, 9:38 pm


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