Considering investing money intended for charitable donations in buying a rental property. Can I realistically make the rental a non profit?

The first thing to remember: Just because something is a nonprofit or a not-for profit doesn't mean it is a charity. A Credit Union is a non-profit, but it isn't a charity.

That property could be setup as charity if the property was being used to house homeless people or some other disadvantaged group. You would have to work with your tax advisor to make sure all the proper paperwork is in place.

Appreciated real estate can be donated to a donor advised fund. However, the fund will then sell the real estate; it will neither manage it nor allow you to manage it.

Schwab Charitable appears to have a $0 minimum asset value to open a donor-advised fund.

If you wish to continue to manage the property, perhaps a local charity would be interested in your plan to donate and then to help the charity manage the property. The charity would then have the potential problem of generating Unrelated Business Income.

Finally, you could consider that landlords have a number of ways to minimize their taxes. You could own the property personally, work to minimize your taxes and donate the rental profits as you like.

Not an answer to your question, but...

The standard way to donate an amount that is too large is to loan a charity the money and have them make progressive repayments offset by donations.

So you have $200,000 and can get tax relief back on $50,000 in a normal year. You loan a charity $200,000, on terms where they pay you back $50,000 every year for four years. You agree to donate $50,000 every year for four years. You can claim tax relief on $50,000 for four years. No actual money changes hands after the initial transfer.

This doesn't work if for some reason you end up not getting the full tax relief on each of the four years - but you can't lose any more money than your initial donation. A charity will have a lawyer that will know how to sort it out.

Non-profits can own investments of almost any kind, and earn from investments of almost any kind.

The non-profit has several options:

1. You can donate the cash to the non-profit and the non-profit can buy the house and sit on it, or attempt to earn rent from it.

2. You can buy the house and donate it to the non-profit, and the non-profit can also attempt to earn rent from it.

In general, number 2 can become more favorable for an expanded range of assets because the jeopardizing investments regulation does not apply to donated investments, only investments that were subsequently bought by the non-profit.

By the way, why are you worried about how much you donate to a non-profit? The amount you donate rolls over into future years for up to five years, charitable deductions have roll overs. This is not a factor unless you just want to keep your money longer. But this still seems to not be a factor because either entity (yourself or the non-profit) can own the house for investment.