House Research Department Updated: July 2006
Charitable Gambling in Minnesota Page 5
“Lawful purposes” include the following:
• Any expenditure by or contribution to a 501(c)(3) tax-exempt organization, or to a
501(c)(4) organization that conducts a community festival, if the organization meets
board operating and expenditure standards
• Contributions to, or expenditures to benefit, individuals or families to relieve poverty,
homelessness, or disability
• Contributions for treatment of problem gambling
• Contributions to an accredited educational institution
• Contributions to an individual, a school, or the scholarship fund of a nonprofit
organization whose primary mission is to award scholarships, where funds are awarded
through an open and fair selection process
• Activities that recognize military service
• Contributions or expenditures to honor humanitarian service demonstrated by
philanthropy or volunteerism
• Recreational, community, and athletic facilities primarily for persons under 21,
provided they do not discriminate on the basis of gender
• State, local, and federal taxes on gambling, state unrelated business income tax on
gambling, and state license and premises permit fees
• Property taxes on gambling premises an organization owns or, in the case of a veterans organization, leases (until January 1, 2006, these expenditures were limited to the maximum amount that can be spent for rent for bingo premises, or $35,000 per year for other premises)
• Contributions to government and government agencies (except a direct contribution to
a law enforcement or prosecuting agency)
• Contributions to or expenditures by a religious organization
• Department of Natural Resources-approved expenditures on public snowmobile and
ATV trails
• Expenditures for outdoor natural resources, including wildlife management projects,
maintenance and grooming of public trails, and DNR-coordinated safety training and
education, when approved by the DNR
• Nutritional programs, food shelves, and congregate dining programs primarily for
disabled persons or persons age 62 and older
• Contributions to community arts organizations or expenditure to sponsor arts programs in a community
• For veterans organizations, payment of certain utilities on the building used as the
organization’s primary headquarters, and spending up to $5,000 in a year for meals and
other membership events for members and spouses that recognize military service
House Research Department Updated: July 2006
Charitable Gambling in Minnesota Page 6
With limited exceptions, “lawful purposes” do not include the building, repair, maintenance, or improvement of a building that an organization owns or leases, unless (1) the building will be used exclusively for a lawful purpose; (2) the building will be used extensively as a meeting place by other nonprofit organizations or service groups with no rental fee; or (3) the building replaces another building owned by the organization that is destroyed or made uninhabitable by fire or catastrophe or is taken by eminent domain.
Also excluded from “lawful purpose” are (1) expenditures to influence governments or elections; (2) contributions to a parent organization if the parent organization gives any money to the contributing organization; and (3) contributions from one organization to another unless the contribution is approved by the board.
