When nonprofits should return donations

Return requests generally are rare, but occasionally donors may ask your not-for-profit to return their contribution. Are you required to comply? What if you’ve already spent the money? There’s no federal law that requires nonprofits to return donations. Individual states have enacted various laws that could come into play, but these generally are vague about returning gifts. However, returns are mandatory if terms of a donation agreement are substantially violated or a nonprofit employee commits fraud. You can head off return requests by developing a written refund policy. Contact us for help.