November/December 2014; Nonprofit Colorado
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In the latest issue of Nonprofit Colorado (hosted at the Colorado Nonprofit Association website), we found a handy guide to taking donations from marijuana businesses. The points are taken from a recent session hosted by the Colorado Nonprofit Association, the Colorado Association of Funders, and the Association of Fundraising Professionals. The small article covered both the HR and fundraising considerations, but since the HR ones were pretty predictable, we decided to pass along only the fundraising considerations.
Here they are, as stated in that article:
- If you accept $10,000 or more in aggregate from a marijuana business (in cash, because marijuana businesses can’t bank), you are required to file a federal form 8300.
- If you decide to accept funds from a marijuana business, it is a good idea to review the license application and license renewal of said business first and perform an online search to determine its legitimacy.
- There is no guidance as to whether marijuana businesses can take a tax deduction for charitable donations. Any substantiation letters should read, “You may be entitled to a tax deduction.”
- Any dollars received from a marijuana business cannot be used for the explicit purpose of promoting said business. The definition of “promoting” is unclear.
We would like to see this last requirement imposed on nonprofits that take money and goods from pharmaceutical companies. And this is only an informed guess, but we figure that the money from the “pharmas” not only dwarf the potential dollars from the pot businesses in Colorado, but the manners in which “promotion” occurs (see here and here) are many and varied.—Ruth McCambridge