A charity must permanently dedicate its assets to an exempt purpose described in section 501(c)(3), or to the federal government or to a state or local government for a public purpose. In certain states, reliance may be placed upon state law to establish permanent dedication of assets for exempt purposes. This is based on Revenue Procedure 82-2, 1982-1 C.B. 367.
Nonprofit Charitable Corporations
If you are a nonprofit charitable corporation formed in the following states, then you do not need a specific provision in your articles of incorporation providing for the distribution of assets upon dissolution:
Missouri (organized under MO. ANN. STAT. Chapter 352 (Religious and Charitable Associations))
Testamentary Charitable Trusts
If you are a testamentary charitable trust formed in the following states, then you do not need a specific provision in your trust agreement or declaration of trust providing for the distribution assets upon dissolution:
West Virginia (However, a state court decision has held that the cy pres doctrine does not apply to a scientific organization in West Virginia.)
If you are a testamentary trust formed in the states listed below and the language of your trust instrument provides for a general intent to benefit charity, then you do not need a specific provision in your trust agreement or declaration of trust providing for the distribution of assets upon dissolution:
|District of Columbia||New Hampshire|
|Florida||New Jersey & New York|
Note that you may rely upon state law in these situations to establish permanent dedication of assets to an exempt purpose if there is no specific provision addressing the distribution of assets upon dissolution in your organizing document. If you include a provision addressing the distribution of assets upon dissolution in your organizing document, you cannot rely upon state law, and the provision must establish that your assets will be permanently dedicated to an exempt purpose. For examples of provisions that meet these requirements see Sample Articles.