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Posted on May 28, 2020

As a general rule, a donation to a §501(c)(3) nonprofit charitable organization may be tax-deductible, while a gift to an individual is not. Donors and §501(c)(3) nonprofit organizations cannot take advantage of this rule by passing payments from donors, through the §501(c)(3) nonprofit organization to specific individuals. An organization which participates in this type of transfer — called a pass-through payment — on a regular and ongoing basis is at risk of losing its §501(c)(3) tax-exempt status.

Learn more about how money for specific causes may or may not be considered tax-deductible donations in this article.