Setting up a 501c(3) charity branch of HOA

I am wondering if it is possible to create a 501c3 charity "arm" of the HOA? We currently are not a charity, and the main HOA wouldn't qualify as a charity anyway. However, it would be nice to create a 501c3 charity that could accept donations from AmazonSmile, Kroger, and other entities that give small contributions to charities. Has anyone explored this and what avenues are available?

I'm sorry if I was unclear in my original post. I am looking to see if we could form a separate organization as a charity that could accept donations and use those donations to improve our parks and community spaces. I would like to receive donations from corporations such as AmazonSmile and Kroger and others that offer donations to charities based on customer selection, and use those donations to improve our parks a bit more.

I am not proposing that we re-incoporate our entire HOA into a charity. We are not a charity and that wouldn't make sense.

You should probably confirm with the person who does your taxes (and read up on the IRS's web site), but there are limits on the kinds of income an HOA can receive and how this income is taxed.

One of the 55+ communities in my area has things like benches, trees, and whatnot that have been donated to the association in memory of residents who have died. But what the legal and tax ramifications of that are, I don't know.

The bottom line, though, is that HOAs are meant to be funded by assessments from members, and members don't get a tax deduction for this. Trying to set up a charity can look like an attempt to do an end-run around this, and you don't want the IRS to get curious.

So talk to the professionals. This still strikes me as a good way to make potentially costly mistakes.

I forgot the obvious part. In order to qualify as a charity, the organization has to benefit the public (or a well-defined section of it such as the homeless). HOAs don't qualify because the benefits are targeted toward private individuals (homeowners).

Creating a charitable branch to essentially perform the same function as the HOA (maintaining or upgrading the property owned by the HOA) is probably a non-starter since it's an end-run around IRS regulations. You're trying to avoid raising assessments to pay for these things.

As I'd said earlier, the only exception I'm aware of was the 55+ community that accepted donations of things in memory of residents, and the items in question had a plaque next to them that listed the resident's name. But I don't know what the association did on its end. For all I know they may simply have announced that if you want to give us something in memory of your loved one, we'll find a place for it and put up the plaque.

The other thing that bothers me is that if you accept donations from outsiders (such as area businesses), they'll expect some kind of quid pro quo such as signage identifying them as the donor. This can create expectations that an HOA can't legally meet, and can create conflicts of interest for the board.

Here be dragons.