Delaware Fire Companies: Nonprofit Status & Budgeting Exemptions

Marydel Volunteer Fire Company in Delaware is facing scrutiny following an investigation that revealed financial mismanagement and improper use of state resources, according to reporting by Delaware Public Media on April 30, 2026. Because fire companies in Delaware operate as nonprofits rather than state entities, they are not subject to the same state budgeting bylaws.

The investigation, conducted by the Delaware Attorney General’s Office and the State Auditor’s Office, found that the fire company had engaged in questionable financial practices, including the commingling of funds and a lack of proper accounting procedures. Specific details of the financial irregularities have not yet been publicly released, but officials have indicated that the issues are significant enough to warrant further investigation.

Delaware’s unique structure for volunteer fire companies—as independent nonprofits—exempts them from certain state financial oversight regulations. According to the Delaware Division of Revenue, any corporation granted an exemption by the IRS as a non-profit organization under Section 501(c) is exempt from Delaware Corporate Income Tax. These companies are also exempt from obtaining a Delaware business license and paying the accompanying gross receipts tax on the sales of most goods and services.

However, this independence comes with responsibilities. Non-profit corporations in Delaware are still required to register with the Division of Revenue and withhold Delaware State income taxes on employees performing services within the state, as well as register with the Delaware Department of Labor. Private foundations conducting activities in Delaware must also file a copy of Federal Form 990 PF with the Delaware Attorney General.

The Attorney General’s Office has stated that the investigation into the Marydel Volunteer Fire Company is ongoing and that they are working to determine the full extent of the financial mismanagement. They are also investigating whether any criminal activity occurred. The State Auditor’s Office is reviewing the company’s internal controls and recommending improvements to prevent similar issues from happening in the future.

This is not the first instance of financial concerns surrounding volunteer fire companies in Delaware. The state has a long history of relying on volunteer fire departments to provide essential fire protection services, but concerns have been raised in the past about the lack of oversight and accountability within these organizations.

The Marydel Volunteer Fire Company has not yet issued a public statement regarding the investigation. Attempts to reach company officials for comment were unsuccessful. Delaware Public Media reported that the company’s board of directors is scheduled to meet next week to discuss the findings of the investigation and determine a course of action.

The investigation highlights the challenges of balancing the need for local control and volunteerism with the need for financial transparency and accountability in Delaware’s fire service system. State lawmakers may consider revisiting the current regulations governing volunteer fire companies to ensure that they are adequately protecting state resources and serving the public interest.

If you or someone you know is experiencing financial hardship, resources are available. You can contact the Delaware 2-1-1 helpline by dialing 2-1-1 or visiting https://www.delaware211.org/.