"Unrelated use" refers to a situation where the tangible personal property donated to a charity is used for purposes that are not aligned with the charity's exempt purpose or function.
Why do we ask this?
If the property is used in a way that does not directly support the charity's mission or activities, it would be considered "unrelated use." In such cases, the donor must reduce the deduction by the amount of appreciation in the property’s value, as the charity is not using the property in a way that qualifies for the full charitable deduction.
Example
If a painting donated to an educational institution is displayed in its library for study and display by art students, the use is not considered unrelated. However, if the painting is sold and the proceeds are used for the institution's educational purposes, the use is considered unrelated.
For more information, refer to Publication 526.