130,500 causes · $320M raised · 4.7 since 2009
HOA or voluntary association
Two entities that share a name and share almost nothing else.
Free for up to 20 items Unlimited bidders No credit card required
A homeowners association
- Membership is mandatory and runs with the property; nobody opts in or out
- Governed by recorded covenants, conditions and restrictions and by bylaws
- The board has fiduciary duties to the members and real legal exposure
- It can levy assessments, place liens and enforce covenants
- It is typically exempt under 501(c)(4) or (c)(7), or files under the specific provisions available to homeowners associations, rather than being a 501(c)(3)
- Assessments are generally not deductible charitable contributions, and neither is a payment at its social event
An HOA that needs money for a common-area project generally has the power to raise it through an assessment. Running an auction instead is a legitimate choice — it is more pleasant than a levy and it builds community — but it is a social fundraiser, not a charitable one, and the page should say so.
A voluntary neighborhood association
- Membership is whoever joins; there is no obligation and no lien
- No covenants, no assessment power, no enforcement
- Frequently unincorporated, which exposes officers personally
- May have no exemption at all, may be a 501(c)(4), and occasionally is a 501(c)(3) where its purposes support it
- Depends entirely on goodwill, which is both the weakness and the point
The first job is finding out which of those applies, because a great many voluntary associations have never established their own status.
The questions to answer before collecting anything
- Are we incorporated, and in what form
- Do we have any tax exemption, and under what section
- Who may sign, and who is personally liable if something goes wrong
- Do we have insurance for an event, and for volunteers
- Where is the money held, and who has access to it
- What do our own bylaws say about fundraising and spending
One conversation with an accountant or attorney answers all of it. For an unincorporated association holding money raised from neighbours, the personal liability question in particular is worth asking out loud.
What to put on the page
One plain sentence naming the receiving entity and stating the position accurately.
- Do not write "tax deductible" without knowing that it is
- Do not issue anything resembling a charitable receipt where it is not one
- Where the answer is that contributions are not deductible, say so — neighbours give to their own street regardless
- Where you are unsure, say the association cannot advise and point people to their own adviser
The middle point is worth emphasising. In this silo the donors are neighbours funding something they can see from their front window, and the deduction is very rarely the reason. Accuracy costs almost nothing here.
Consider a fiscal sponsor for a specific project
Where an association wants deductible giving for a genuine charitable purpose — a public park improvement, a community garden, a tree canopy programme — a community foundation or an existing local charity can frequently act as fiscal sponsor.
The project runs under their status, donors get an accurate answer, and the association does not have to become something it is not. It costs a fee and a conversation, and it is far simpler than incorporating.
Keep neighbourhood money visibly separate
Whatever the structure, money raised from neighbours should sit in an account in the association's name with more than one signatory, with published reporting.
Not because anybody is suspected, but because these funds are held by volunteers who live on the same street as the donors — and a clear structure protects the treasurer more than anybody.
General information, not legal or tax advice. A homeowners association and a voluntary neighborhood association are different entities with different powers and different tax treatment — check your own governing documents and exemption status before telling anybody a contribution is deductible.
More guides for Neighborhood Associations
Frequently asked questions
What defines an HOA?
Mandatory membership running with the property, recorded covenants, a board with fiduciary duties, and the power to levy assessments and place liens. Typically exempt under 501(c)(4) or (c)(7) rather than being a charity.
Can an HOA say donations are deductible?
Generally not. Assessments are not charitable contributions and neither is a payment at its social event — and an HOA needing money for a common-area project usually has the power to levy it.
What should a voluntary association establish first?
Whether it is incorporated, whether it has any exemption, who may sign, who is personally liable, whether there is insurance, and where the money is held. Many have never asked.
Is there a way to offer deductible giving?
A fiscal sponsor. For a genuine charitable purpose — a park improvement, a community garden, a tree canopy programme — a community foundation or local charity can sponsor the project, and it is far simpler than incorporating.
Ready to start your auction?
Name it now and set it up later. Free for up to 20 items, unlimited bidders, no credit card.
Free for up to 20 items · Unlimited bidders · No credit card required