Legal Question in Business Law in Maryland

Can a group of church members open a used furniture store to raise money to pay off our church debt? Can the furniture be donated and in return we sale and proceeds goes to the church?

Asked on 9/25/12, 3:01 pm

1 Answer from Attorneys

Cedulie Laumann Arden Law Firm, LLC

The short answer is "yes," a non-profit may generally collect and sell donated items to further its charitable purposes and individuals can always donate money to a church.

The longer answer is that anything a non-profit does should be carefully thought out, be approved by the board, be consistent with the stated purposes and any financial arrangements must be carefully scrutinized. In most cases it is good to get an attorney and/or accountant to review the proposed set-up. In some cases, a non-profit must pay income taxes on certain types of income not related to its charitable purpose. In some cases, individuals might be considered "professional solicitors" and need to register and post bond before fundraising on behalf of an entity (particularly if the solicitors are getting compensated). If the individuals are themselves running the furniture store (rather than the church), they cannot treat furniture donations as tax exempt though they could deduct the value of any contributions.

I hope that the above answer helps, though it doesn't substitute for specific legal advice.

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Answered on 9/25/12, 4:53 pm

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