Sort of, but not exactly.  That’s the shorthand version of the Internal Revenue Service requirement for handling net remaining assets on the dissolution of a 501(c)(3) charitable organization. It is usually what happens to the funds.

But the actual IRS requirement is to use the funds for “a charitable purpose,” not necessarily to give them to a charitable organization.  Therefore, a scholarship fund could distribute all of its remaining assets to qualified scholarship winners.  Or an organization could give its assets to the local utility to provide funds for low income people who cannot afford electricity for air conditioning in the summer, or for heat in the winter.  Either of these uses would meet the IRS requirement. It would also be permissible to give the assets to a state or local government for public purposes, such as maintaining a public park or supporting the arts.

State law may differ in some states or an aggressive attorney general may object to a distribution to something other than another charity.  It is easiest to give the funds to another 501(c)(3) organization, but it is not required under federal law and probably not required under state law either so long as the funds are given to be used for a charitable purpose.