What percentage of a tax-exempt nonprofit's donations can be used for overhead costs in California?
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There is no limitation, as a general rule, on how much of a tax-exempt nonprofit's donations can be used for overhead costs in California. Some organizations may have a purpose for which overhead is a legitimate use of 100% of donations.
Private foundations (which are tax-exempt non-profits, which (to oversimplify) receive most of their donations from a small number of private individuals rather than the general public or other public charities) incur a penalty tax if they do not make a certain percentage of donations to public charities each year set forth in a federal tax code formula.
