Can a Mississippi city donate funds directly to a 501(c)(3) running a county-owned homeless transition center, or only through the county?

Plain-English summary

Sunflower County owns a building in the City of Indianola that operates as the Sunflower County Transition Center, a homeless services facility. The County partnered with the Sunflower County Ministerial Alliance Counseling Service, Inc. (a 501(c)(3) Mississippi nonprofit) to run the daily operations. A 2022 local-and-private law (Chapter 910) authorized the County to appropriate up to $40,000 per year to the Ministerial Alliance. In 2025, H.B. 1801 amended Chapter 910 to allow the County to appropriate additional funds matching contributions from municipalities, faith-based groups, and private citizens.

In September 2024, the City of Indianola pledged $15,000 toward the Transition Center. Now the City Attorney was asking: (1) does H.B. 1801 authorize the City to make a $15,000 contribution to the County; and (2) if not, can the City make the contribution directly to the Ministerial Alliance under the matching-funds statutes (Sections 21-17-1(8) and 21-19-65)?

The AG's answers:

1. No on the H.B. 1801 path. The 2025 amendment authorized the County to make additional contributions to the Ministerial Alliance, but it did not authorize cities to give money to the County. Local-and-private legislation has limited scope; it authorizes whatever the bill expressly authorizes, and H.B. 1801 spoke only to the County's authority. The bill presupposed municipal contributions but did not actually authorize them.

2. Yes on the direct-to-nonprofit path, with conditions. Section 21-19-65 lets a municipality "expend monies from the municipal general fund to match any other funds for the purpose of supporting social and community service programs" administered by a 501(c)(3) (among others). The City must make the factual finding that the Transition Center is "a social and community service program of the same type and nature as those outlined in Section 21-19-65," and the contribution must be matching funds, not a freestanding gift. Section 21-17-1(8) provides parallel authority and explicitly "overrides the general prohibition against municipal donations" if the City finds (a) the Transition Center is a federally tax-exempt nonprofit organization and (b) the contribution matches existing state, federal, or private funding. The matching-funds requirement is mandatory.

The AG also pointed out two procedural points. First, AG opinions are prospective only under Section 7-5-25; the September 2024 pledge cannot be validated retroactively, but since no money has actually moved, the AG could opine on prospective application. Second, Mississippi's "home rule" statute (Section 21-17-5) generally gives municipalities broad authority over property and finances, but Section 21-17-5(2) carves out donations: cities cannot donate "[u]nless such actions are specifically authorized by another statute or law of the State of Mississippi." Sections 21-17-1(8) and 21-19-65 are two such statutes.

For documentation, the AG cited a 2013 opinion (Edwards II): in the absence of specific mandates, a municipality may develop its own method of documentation, but it must be sufficient to ensure donations are lawful. A resolution duly adopted with the requisite factual findings is the floor.

The opinion also referred the City to the Technical Division of the Office of the State Auditor for further guidance on expenditure procedures.

What this means for you

For Mississippi municipalities considering 501(c)(3) contributions

If a 501(c)(3) is running a service program your city wants to support, do not rely on a local-and-private law that authorizes the county to fund the nonprofit; that law does not give the city authority. Use Section 21-17-1(8) (general 501(c)(3) match) or Section 21-19-65 (social and community service programs match).

Both statutes require matching funds. You need at least one other funding source (state, federal, or private) for the city to match. A pure city gift, with no other funds backing the program, does not fit. Document the matching source.

The factual findings that go in your resolution: (1) the recipient is a federally tax-exempt 501(c)(3); (2) for Section 21-19-65, the program is a "social and community service program" of the type the statute contemplates; (3) the city contribution matches existing other funding. Spread the resolution and findings on the minutes.

For municipal attorneys and city clerks

When the council pledges before getting an opinion, do not panic, but do not pay either. The AG cannot validate past actions. Pull the resolution, get the factual findings on the books prospectively, and pay only after the conditions are met. Document carefully.

If the resolution is missing the factual findings (just a flat appropriation with no nonprofit-status finding or matching-funds determination), reopen it. Boards have authority over their own minutes; cure the deficiency with a supplemental resolution.

For matching-fund accounting, identify the source you are matching against. The Ministerial Alliance gets county money under H.B. 1801; that is a sufficient match base for Section 21-17-1(8) (which contemplates state, federal, or private funding) but only if the funding source qualifies. County funds are arguably "state" funding for matching purposes. Check with the State Auditor.

For 501(c)(3) administrators receiving municipal funds

The municipality must make findings on its end. As the recipient, supply the documentation: 501(c)(3) determination letter, financial statements showing other funding sources, descriptions of the program qualifying as a "social and community service program." Make it easy for the city to write the findings cleanly.

For state legislators drafting local and private laws

If a local-and-private bill authorizes a county to receive city contributions and pass them through to a nonprofit, the bill should also authorize the city to make the contribution. Otherwise the chain of authority breaks. The Indianola/Sunflower scenario is a textbook example: H.B. 1801 presupposed city money flowing to the County, but it did not actually authorize the City to send the money.

For the State Auditor

Watch for municipal contributions to nonprofits without the matching-funds finding or without proper documentation. The AG opinion is clear: the matching requirement is mandatory. A bare donation of municipal funds is the impermissible-donation problem under home rule plus Section 21-17-5(2).

Common questions

Can a Mississippi city give money to a county to fund a county program?
Generally no, unless a statute or local-and-private law specifically authorizes it. H.B. 1801 (2025) did not authorize that path for Indianola contributions to Sunflower County.

Can a Mississippi city give money directly to a 501(c)(3) nonprofit?
Yes, with conditions. Sections 21-17-1(8) and 21-19-65 both authorize matching contributions to qualifying 501(c)(3)s. The city must make factual findings about the nonprofit's status and the matching nature of the contribution.

What does "matching funds" mean here?
The city's contribution must match existing other funding (state, federal, private, or, under Section 21-19-65, "any other funds"). It is not a stand-alone donation. Identify the source you are matching, document it, and confirm the math.

Does the city need a written resolution?
Yes. The AG has long held that municipal donations under these matching-funds statutes require a resolution duly and lawfully adopted and spread upon the minutes, with factual findings that the nonprofit qualifies. The exact form of documentation is up to the city, but it must be sufficient to establish lawfulness.

Can the city retroactively validate a 2024 pledge?
The AG cannot retroactively validate. AG opinions under Section 7-5-25 are prospective only. The City should treat the pledge as informational and act only prospectively, with the right factual findings now.

Where does the State Auditor fit in?
The AG referred the City to the Technical Division of the Office of the State Auditor for further guidance on expenditures of public funds. The State Auditor is the right office for procedural questions about disbursement.

Background and statutory framework

Mississippi's "home rule" statute, Section 21-17-5, gives municipalities general control over their property and finances. Subsection (2) carves out donations:

Unless such actions are specifically authorized by another statute or law of the State of Mississippi, this section shall not authorize the governing authorities of a municipality to . . . [d]onate any funds, property or thing of value to a religious, charitable, fraternal, educational or civic organization or institution.

Section 21-17-1(8):

In addition to the authority to expend matching funds under Section 21-19-65, the governing authority of any municipality, in its discretion, may expend municipal funds to match any state, federal or private funding for any program administered by the State of Mississippi, the United States government or any nonprofit organization that is exempt under 26 USCS Section 501(c)(3) from paying federal income tax.

Section 21-19-65 grants municipalities the "power to expend monies from the municipal general fund to match any other funds for the purpose of supporting social and community service programs" administered by state or federal government or by a 501(c)(3) nonprofit.

The AG opinion in Thames (Oct. 2, 2009) read "any other funds" in Section 21-19-65 broadly: "funds from any source whatsoever, including federal, state, and county funds and funds from private individuals, groups and organizations."

The AG opinion in Cook (Sept. 17, 2010) said a city must make the narrow factual determination that the program is "a social and community service program of the same type and nature as those outlined in Section 21-19-65" before contributing under that statute.

The AG opinion in Kirk (Nov. 29, 2023) confirmed Section 21-17-1(8)'s authorization "overrides the general prohibition against municipal donations."

The AG opinion in Bruni (Nov. 19, 2024) emphasized that the matching-funds requirement is mandatory under both statutes.

The AG opinion in Edwards II (Apr. 22, 2013) addressed documentation: a municipality may develop its own method, but the documentation must be sufficient to establish lawfulness, and a resolution duly adopted on the minutes with the factual findings is the standard.

H.B. 1801 (2025 Legislative Session) amended Chapter 910 of the 2022 Local and Private Laws to authorize Sunflower County to contribute additional funds to the Ministerial Alliance matching contributions from municipalities, faith-based groups, and private citizens. The bill became immediately effective on March 28, 2025. The AG read the bill as authorizing only the County's contribution, not municipal contributions to the County.

Citations

• Miss. Code Ann. § 7-5-25 (scope of AG opinions; prospective only)
• Miss. Code Ann. § 21-17-1(8) (municipal authority to match state, federal, or private funding for 501(c)(3) programs)
• Miss. Code Ann. § 21-17-5 (municipal home rule)
• Miss. Code Ann. § 21-17-5(2) (carve-out for donations; specific authorization required)
• Miss. Code Ann. § 21-19-65 (municipal matching funds for social and community service programs)
• Miss. House Bill No. 1801 (2025 Legislative Session) (authorizing additional Sunflower County contributions to Ministerial Alliance)
• 2022 Miss. Local and Private Laws, Ch. 910 (original Sunflower County contribution authority)

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2025/05/D.-Hopson-May-1-2025-Municipal-Authority-to-Contribute-Funds-to-Nonprofit-Organization.pdf

Original opinion text

May 1, 2025

Derek Hopson, Sr., Esq.
Attorney, City of Indianola
Post Office Box 266
Clarksdale, Mississippi 38614
Re:

Municipal Authority to Contribute Funds to Nonprofit Organization

Dear Mr. Hopson:
The Office of the Attorney General has received your request for an official opinion.
Background
The Board of Supervisors of Sunflower County ("County") owns a building in the City of
Indianola ("City") which serves as the Sunflower County Transition Center ("Transition Center"),
a County facility addressing the needs of the area homeless population. The County has partnered
with the Sunflower County Ministerial Alliance Counseling Service, Inc. ("Ministerial Alliance"),
which you indicate is a 501(c)(3) tax-exempt Mississippi nonprofit corporation, to administer the
daily operations of the Transition Center.
To assist with funding such operations, the County is authorized under Chapter 910, Local and
Private Laws of 2022, to make an annual appropriation of up to $40,000.00 to the Ministerial
Alliance. According to your request, the County and the Ministerial Alliance contemplate and
desire municipalities within the County, including the City, to also make an annual contribution,
aside from and in addition to the County's appropriation.
In September 2024, the City pledged to give $15,000 toward the shelter's operations and authorized
you to seek an official opinion from the Attorney General's Office as to the legality of the proposed
appropriation.
Questions Presented
1. Does Chapter 910, Local and Private Laws of 2022, as amended by House Bill No. 1801
of the 2025 Legislative Session, authorize the City to make a $15,000.00 contribution to
the County?

2. Can the City instead make the contribution directly to the Ministerial Alliance pursuant to
   Mississippi Code Annotated Sections 21-17-1(8) and 21-19-65?
   Brief Response
3. No. Mississippi House Bill No. 1801 (2025 Legislative Session) only grants additional
   contribution authority to Sunflower County. It does not authorize the City of Indianola or
   any other municipality to donate funds to the County.
4. The City may make a contribution directly to the Ministerial Alliance if it makes the
   requisite factual determination under each applicable statute prior to making the
   contribution.
   Applicable Law and Discussion
   As a preliminary matter, you state in your request that "[i]n and about September 202[4], the City
   pledged to give $15,000 toward the [Transition Center's] operations. . . ." Pursuant to Mississippi
   Code Annotated Section 7-5-25, official opinions of the Attorney General are limited to
   prospective questions of state law only and can neither validate nor invalidate past action. See MS
   AG Op., Turnage at 1 (Oct. 11, 2021). While a pledge was made, we understand that no money
   has actually been paid by the City to the Ministerial Alliance; therefore, we provide guidance for
   prospective application only.
   Section 21-17-5, the "home rule" statute, provides the governing authorities of municipalities with
   general control over municipal property and finances. However, donations are explicitly excluded
   from that control "[u]nless such actions are specifically authorized by another statute or law of the
   State of Mississippi. . . ." Miss. Code Ann. § 21-17-5(2). Such authorization can take the form of
   local and private legislation or a general law.
   You first ask whether certain local and private legislation authorizes the City to make a $15,000.00
   contribution to the County.
   House Bill No. 1801 of the 2025 Legislative Session ("H.B. 1801") was signed by the Governor
   on March 28, 2025, and became immediately effective. The bill amends existing local and private
   law authorizing Sunflower County to contribute up to $40,000.00 per year of county funds to the
   Ministerial Alliance for the administration of the Transition Center. 2022 Miss. Local and Private
   Laws, Ch. 910 § 2. As amended, the law now authorizes the County to annually contribute an
   additional sum "equal to no more than the yearly aggregate contributions that are made to the
   county by municipalities, faith-based groups, and/or private citizens for the specific purpose of
   assisting in the administration of the daily operations of the Sunflower County Transition Center."
   Miss. House Bill No. 1801 (2025 Legislative Session).
   While H.B. 1801 presupposes the authorization for municipalities to make contributions to the
   County, with such contributions to then be passed through to the Transition Center, the plain
   language of the bill does not provide such authorization. Instead, under the limited scope of local
   and private legislation, H.B. 1801 only grants authority to the Board of Supervisors of Sunflower
   County to contribute additional sums to the Ministerial Alliance, with certain limitations.
   Therefore, the City cannot make the contribution in question under the provisions of H.B. 1801.
   Second, you ask whether the City may, instead, make the contribution directly to the nonprofit
   organization under a pair of related statutes.
   Section 21-19-65 grants municipalities the specific "power to expend monies from the municipal
   general fund to match any other funds for the purpose of supporting social and community service
   programs" administered by the state or federal government or by a tax-exempt nonprofit
   organization. Miss. Code Ann. § 21-19-65 (emphasis added); see MS AG Op., Thames at 2 (Oct.
   2, 2009) ("The phrase 'any other funds' contained in Section 21-19-65 refers to 'funds from any
   source whatsoever, including federal, state, and county funds and funds from private individuals,
   groups and organizations.'") (internal citation omitted).
   If the City makes the narrow factual determination that the operation of the Transition Center by
   the Ministerial Alliance is a "social and community service program . . . of the same type and
   nature as those outlined in Section 21-19-65[,]" then the City may contribute matching funds to
   the Transition Center as run by a 501(c)(3) tax-exempt Mississippi nonprofit corporation. MS AG
   Op., Cook at *1 (Sept. 17, 2010).
   Section 21-17-1(8) provides broader supplemental authority:

In addition to the authority to expend matching funds under Section 21-19-65, the
governing authority of any municipality, in its discretion, may expend municipal
funds to match any state, federal or private funding for any program administered
by the State of Mississippi, the United States government or any nonprofit
organization that is exempt under 26 USCS Section 501(c)(3) from paying federal
income tax.

"The authorization in Section 21-17-1(8) overrides the general prohibition against municipal
donations. . . ." MS AG Op., Kirk at 1 (Nov. 29, 2023). Accordingly, if the City determines 1)
that the Transition Center is a federally tax-exempt nonprofit organization, and 2) that the amount
of the contribution matches existing state, federal, or private funding, then the City may make the
contribution under Section 21-17-1(8).
It is mandatory that "any donation made pursuant to either of these two statutes must comply with
the requirement for matching funds." MS AG Op., Bruni at 2 (Nov. 19, 2024) (emphasis added).
In closing your request, you suggest a few potential methods of documenting compliance with the
above statutes and ask for our concurrence. With regard to the same, this office has previously
opined as follows:

Mississippi Code Annotated Sections 21-17-1(3) and 21-19-65 are silent with
respect to the specific method of documentation required for authorized lawful
donations, other than the adoption of a resolution duly and lawfully adopted and
spread upon its minutes, which includes the requisite factual findings that the non
profit entity qualifies for the entitled donation of funds. Thus, in the absence of any
specific mandates with respect to documentation of donations, it is the opinion of
this office that a municipality may develop, in its discretion, its own method of
documentation. Whatever method of documentation the municipality employs, it
should be sufficient enough to ensure that its donations are lawful.

MS AG Op., Edwards, II at *1 (Apr. 22, 2013) (emphasis added).
Finally, because your request deals with the expenditure of public funds, we also refer you to the
Technical Division of the Office of the State Auditor.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By:

/s/ Caleb A. Pracht
Caleb A. Pracht
Special Assistant Attorney General