Richard Smith wrote:
I can tell, the requirements do not appear to be terribly onerous.
Getting IRS 501(c)(3) looks a bit more confusing, but so far I haven't
found anything that would imply it would be terribly hard either.
I'm the president of my engineering fraternity's Housing Corporation
and I've had a bit of experience with the 501c3 stuff. Its quite
tricky.
We are a non-profit organization but we can't get 501c3 status because
you have to be 100% educational. The rules and regs for what
qualifies as educational are very strict. 501c3 allows donations to
the organization to be tax-deductable so to keep people from
laundering money through c3 orgs they are picky.
The company making the stuff couldn't qualify for 501(c)(3) status.
That status is only available for charities, service clubs and
organizations like that. Non-profit corporation only means that any
profit is not distributed to the shareholders/members.
What is normally done is that the non-profit org also sets up a
seperate foundation that is c3 and then uses that fund to do the 100%
educational stuff. So you could receive tax-deductable monies and use
them to provided OGD1 boards to students or labs or sponsor a student
to work on some project.
OTOH, it is true that we could organize a foundation that (like the FSF)
would qualify for 501(c)(3) status.
Mixing of c3 funds and non c3 funds will get you in IRS trouble quick
if you don't have the accounting in order. Especially if $$ ammounts
are large.
Yes, you need a good set of books. The IRS are not people that you want
upset with you.
I was the treasurer of the Men's Garden Club of Green Valley and my
Father was an accountant. The Club did have 501(c)(3) status and we
were tax exempt for most activities although I had difficulty explaining
which were tax exempt and which were not to some of the other officers.
We might be able to apply for tax exempt status under one of the other
sections of 501(c). However this would not mean that donations were tax
deductible. It would only mean that we would not be subject to
corporation taxes.
--
JRT
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