What is a Charity?

What is a charity? A charity is an organization that be of benefit (do positive things) and must benefit the public. Benefitting the public doesn’t mean the charity has to benefit everyone. Rather, a charity can benefit a geographical area or people with a specific characteristic such as people with cancer, teachers, or children.

In order to qualify as a charity, the organization must follow several rules that include:

• The charity must fall into a category that the law deems as charitable. Such as preventing poverty, or advancing the arts, culture, heritage, or science.
• The only purpose of the organization must be charitable.
• Charities are not allowed to make a profit. Therefore, all money made through fundraising and donations must go toward achieving the goals of the charity.
• A charity can’t have owners or shareholders who benefit from it.

What is the difference between a charity, nonprofit, and 501c3?

A nonprofit is an organization that uses its income and profits for the organization’s main gal that supports the mission. The three main categories include public charities, private foundations, and private operating foundations.

A charity is a type of nonprofit that engages in activities aimed at improving lives in the communities.

501c3 is the tax code designation for tax exempt nonprofits.

Why donate to a nonprofit?

Why donate to a nonprofit? When we donate to a nonprofit, we help make a difference that we are unable to provide with our own hands. Whether you donate rental property toa charity, money, or your time, what you are doing is empowering other people to effect change in the local community.

Alongside the altruistic goals of donating to a charity you can receive multiple tax benefits such as not paying capital gains taxes and using the rental property charitable donation as a tax deduction.

Types of rental property I can donate to a charity.

Types of rental property I can donate to a charity. Rental property comes in many forms. And charitable organizations can use rental property in many ways to fulfill the fundraising and other needs of the charity. Below are a few examples of types of rental property that can be donated to a charity.

Donate commercial/residential rental property.

Donate commercial/residential rental property. Commercial residential rental property is multi-unit property with four or more rental units. These 4-flat and larger apartment buildings can be found throughout the Chicago area and range from a red brick 4-flat apartment building to massive apartment complexes with hundreds of units.

Donate residential rental property.

Donate residential rental property. Residential rental property is distinguished from commercial rental property as having three or fewer rental units. For example, a 3-flat brick apartment building, a 2-flat apartment building, or a single-family home and condo used as a rental property. While a single-family home isn’t specifically considered donating a rental property to charity, a single-family home can be donated to charity. Since many single-family homes are used as rental property, we thought it important to also mention it here.

Donate commercial space to a charity.

Donate commercial space to a charity. Many commercial properties such as a storefront multi-use building can be donated to charity. Leased and rented properties such as a local strip mall, a repurposed building such as a church, firehouse, or industrial building, warehouses, gas stations, and more are great opportunities for donating real estate to a charity.

One thing many people don’t realize is that while a church is considered a nonprofit, it is the organization, not the physical building that is a nonprofit. So, if a local church begins operating out of another building and the current church building has been sold, then the church may be considered a commercial building.

Are you ready to donate rental property to a charity?

If you are interested in donating a rental property, house or commercial real estate, contact the Urban Renewal Project, we’d like to help you donate to a worth cause in such a heartfelt way.