License nonprofit data to AI: what the tax code says
The short answer
No company we read lists nonprofits. Tax code section 513(h) covers exchanging or renting donor names to another qualifying organization only, so a deal with a company is outside that text. Section 512(b)(2) excludes royalties from unrelated business taxable income. A tax professional applies the rules.
This page reports what the statutes and buyer pages say. It isn't legal or tax advice.
Does any company ask for nonprofit data?
Not by name, on the pages I read. micro1 lists six areas and Mercor lists eight sectors. Troveo's page names tools and no sector.
That's a negative finding. No page I read rules out a nonprofit's operating records, and none invites them. Our industry page shows what each names.
What does the tax code say about donor lists?
26 U.S.C. 513(h)(1) applies to an organization described in section 501 with contributions deductible under section 170(c)(2) or (3). For such an organization, the term "unrelated trade or business" does not include a business that consists of exchanging with another such organization the names and addresses of its donors or members, or renting those names and addresses to another such organization.
Both activities in the text run between qualifying organizations. The text I read doesn't mention a sale or license to a company.
What does it say about royalties?
26 U.S.C. 512(b)(2) says unrelated business taxable income excludes "all royalties" measured by production or by gross or taxable income from the property, with the deductions directly connected to them. Whether a payment for a data license is a royalty isn't answered there. Our tax page lists what IRS texts say about royalties.
What about donor expectations and state law?
I didn't read the Donor Bill of Rights, because the Association of Fundraising Professionals' page blocked my fetch. I also didn't check whether the CCPA reaches a given nonprofit, or any state charity regulator's rules. Those are questions for counsel.
The customer-data rules on our consent page and CCPA page explain the notice question for customer records, and donor records raise the same one.
What can a nonprofit gather first?
List which records name donors, members or beneficiaries, what each was told when they gave, and which grant or vendor agreements limit use. The rights check asks the contract and personal-data questions and lists what to settle with counsel.
Talk to a privacy or commercial lawyer in your state, and to a tax professional about your own situation, before you sign.
Vaultfish helps you run the process. We are not lawyers and this is not legal advice. If you need counsel who knows this area, we can point you to one. Ask for a referral
