Question: We have a lot of great nonprofit organizations in our city that do good work. Can the city make donations to them to help accomplish their goals?Answer: While nonprofits often provide an important public service, there is not general authority under state statute to make donations to organizations based on their status as nonprofit. There are specific provisions that allow for contributions to be made to:
Artistic Organizations—An “artistic organization” is an association, corporation, or other group that provides an opportunity for people to participate in the creation, performance, or appreciation of artistic activities.
Chamber of Commerce—State law authorizes cities “to appropriate not more than $50,000 annually to any incorporated development society or organization of the state for promoting, advertising, improving, or developing the economic and agricultural resources of the city.”
Food Shelf—Any city may appropriate an amount to provide grants to nonprofit organizations that operate community food shelves and provide food to the needy without charge.
Prevention of Cruelty to Animals—If a city contains a society for the prevention of cruelty to animals (SPCA), it may appropriate for the maintenance and support of that SPCA “in the transaction of the work for which they are organized” any sum of money not otherwise appropriated. However, no part of such an appropriation may be expended for the payment of the salary of any officer of the society.
Another option for the city is to use their general contracting authority to make a donation to an organization for providing a service. An example of this could be the council contracting with a club to spend a Saturday cleaning up public grounds in exchange for money. In this example, the city would normally have to spend funds on the park cleaning but instead of using city staff, they have contracted with the club to provide the service.
Lastly, if a city maintains a fund created from gambling proceeds, those proceeds may be used for many types of charitable contributions.
Written by Amber Eisenschenk, staff attorney with the League of Minnesota Cities. Contact: aeisenschenk@lmc.org or (651) 281-1227.
This blog post conveys general information. It’s not legal advice. Please check with your city attorney before acting on this information.