Rev. Rul. 56-329

Section 170(a)(1) of the Internal Revenue Code of 1954 states that, to the extent provided therein, there shall be allowed as a deduction any charitable contribution (as defined in subsection (c)), payment of which is made within the taxable year. Charitable contributions as described in subsection (c) include those made by individuals to a domestic fraternal society, order, or association, operating under the lodge system, but only if such contribution or gift is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Accordingly, it is held that contributions to an organization or fund to be used for the purpose of acquiring, erecting, and/or maintaining a building which is used by a fraternal organization in carrying on its fraternal and other activities, do not constitute contributions for exclusively charitable purposes, even though some of the activities in which the fraternal organization engages may be of a charitable nature. Compare I.T. 3261, C.B. 1939-1 (Part 1), 122, which holds that contributions to a fraternal society for the use of a home established for the care of aged and indigent members are deductible. Also compare Revenue Ruling 54-243, C.B. 1954-1, 92, which holds that, under certain conditions, an organization exempt under a section other than section 101(6) of the Internal Revenue Code of 1939 (section 501(c)(3) of the 1954 Code) may establish a separate fund exclusively for religious, charitable, scientific, literary, or educational purposes, apart from its other funds, and that contributions to the fund would be deductible by donors under sections 23(0) and (q) of the 1939 Code.