Authorized Donors: Turn your A.C. into a magnet of trust and funding.

Authorized Donors: Turn your A.C. into a magnet of trust and funding

Obtaining and maintaining authorization as an Authorized Donor enhances fundraising, professionalizes management and reduces fiscal risks. Here we explain, on 1 page, what the law requires, what your association wins and where organizations in Mexico tend to fail.

1) What is an Authorized Donor?

Son Civil Associations non-profit organizations that meet special requirements to receive tax-deductible donations. In addition, they enjoy a favorable tax regime provided that they allocate their resources to the purposes established in their statutes, such as social assistance, education, culture or health.

2) Key Benefits

• Boosting fund-raising: The donor can deduct the donation from their taxes, which encourages support for the association.
• Reputation and visibility: The inclusion in the official list of grantees reinforces the trust of private and institutional donors.
• Operational certainty: The special regime provides a clear legal framework for planning and implementing medium- and long-term projects.

3) Requirements and permanence

To obtain authorization, the A.C. must submit a formal request to the tax authority (SAT), accompanied by its statutes, operational evidence and documentation that verifies that its object is aligned with the permitted purposes.

Once obtained, the association must:

• Allocate assets only to their corporate purpose.
• Avoid Distribute remnants (utilities) among partners.
• Maintain transparency in the use of donations.
• Dispatch Online Digital Tax Receipts (CFDI) valid.
• Present annual reports on the use and destination of resources.

Warning: Failure to comply with these obligations may result in Revocation of the authorization.

4) Key conditions: education and health

• Education: Associations that grant scholarships must do so through Open contests And with Objective criteria. This guarantees the deductibility of donations and the permanence of the authorization.
• Health and Care: Those focused on health services or support for vulnerable groups must demonstrate that their programs effectively serve the beneficiaries provided for in their statutes.

5) Three key tests to avoid risks

• Transparency and traceability: Have information available about current authorization, the use of donations and tax compliance.
• Correct tax check: Dispatch CFDI with grantee supplement only as long as the authorization is in effect.
• Permanence monitoring: Periodically check that there are no causes of Revocation, such as allocating resources for different purposes or breaching tax obligations.

6) Good Practices

• Maintain files and records of beneficiaries
• Implement clear internal policies for the management of donations and scholarships.
• Publish a annual report accessible about the destination of the resources.
• Train administrative staff in the correct use of CFDIs.
• Periodically review the validity of the authorization.

Conclusion

Becoming an Authorized Donor is a strategic step for any Civil Association that seeks to strengthen its funding and credibility. With the current authorization, donors trust more, resources grow and the organization can focus on fulfilling its social mission more solidly.

If you have any questions, send us an email to l.manzano@rmgsc.com