Financial Assistance to Clients

I have a friend who serves on the board of a small nonprofit, and he asked me for advice. The nonprofit got money from a major donor to give financial assistance to needy families in their community. Think helping them buy food, or helping them pay rent. He's asking how to do this properly.

I know they need to ensure the money is used for charitable purposes: the recipients need to be in a charitable class, and they need to make sure the money is used as intended. And they need to report it on their 990.

He is wondering how best to release money for help with utilities or rent. Can the nonprofit, for example, cut a check directly to the utility company or landlord?

submitted by /u/gpd209
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