A donation is a gift or a grant given from one entity to another. The term is both an ordinary word and a word with a special meaning in a particular context when used by nonprofit organizations to specify a gift given with the expectation that it is tax-deductible.
There is certainly no law against a for-profit business owner asking anybody to provide a gift or grant to the business without the expectation of returning the item. A person can ask a relative to "donate" money to keep a business afloat, or attempt to raise supporting gifts of materials or cash in a variety of ways. Also, some private and public entities provide for-profits with taxable business grants that are, technically, donations.
However, the word "donation" does have a common usage as a specialized term. Nonprofits ask for donations to support a cause and have special status with the IRS that makes those donations tax-deductible. A for-profit business that accepts a donation would not be able to provide the same tax-deductible benefit.
Soliciting the Public
While it is the case that a for-profit business can accept donations, it has to be careful not to run afoul of a state's laws against soliciting the public for donations without registering with the state attorney general. If a for-profit business is asking for "donations," it has to at least make it clear that the business is not a nonprofit.
- Photo Credit Donations image by Rebs O from Fotolia.com
How to Ask for Donations
Asking for a donation generally requires careful planning, developing personal relationships, making specific requests and engaging donors. During the planning stage, successful...
How to Ask for Corporate Donations
Even during tough economic times, most companies budget funding for charity donations. Charitable donations serve two purposes from a corporate perspective. They...
How to Get Donations for a 501(c)(3)
Although 501(c)(3) status allows your nonprofit organization to accept tax-deductible donations, raising money can still be difficult if not done correctly. Potential...
How to Ask for a Charitable Donation
Have you ever been put in the position of asking for a donation for your church, school or favorite non-profit organization? Some...
How to Set Up a Donation PayPal Account
When you set up a PayPal donation account, anyone can send you a secure donation through PayPal simply by clicking on a...
How Do I Accept Donations on a Pending 501c3?
If you have filed for a 501c3 designation, but have not yet been approved, you can still accept donations. According to the...
How to Get Donations to Start a Business
Raising startup funding is one of the biggest challenges for any new business. Banks are often reluctant to make loans to start-ups,...
Tax Deductions for Non-Profits
Non-profit companies operate with a defined purpose and use surplus revenues to carry out that purpose as opposed to distributing it to...