[ZF] Why is non-profit status important?

Christian Zagrodnick cz at gocept.com
Sun Feb 12 08:56:39 UTC 2012


On 11.02.2012, at 18:42, Jens Vagelpohl wrote:

> 
> On Feb 10, 2012, at 15:14 , Jim Fulton wrote:
> 
>> Aroldo's note prompts me to ask:
>> Why is non-profit status so important?
>> 
>> Do we think the amount of contributions would be substantially
>> different if the Foundation was non-profit? I'm skeptical.
>> 
>> Given that the board members are all busy, pursuing non-profit
>> status seems like a waste of time.
> 
> One point that no one has brought up: 
> 
> Even with today's paltry sponsor income for which we'd never pay any taxes even as a for-profit the first few years were very profitable. All of that high income was taxed based on the assumption that the non-profit application process is running and will be finished. I fear that if the application was given up completely and the foundation gets an "official" for-profit status we'd be faced with a hefty tax bill from the IRS for that early income.

True. The tax bill will be hefty. The question is if the tax bill is less than all the time, money and energy which needs to be put into getting non-profit. In fact we could pay somebody to do all the work to get non-profit (assuming doing the work is the problem). This might be cheaper than paying taxes. If it's not, pay taxes. 

My 2cents.

-- 
Christian Zagrodnick · cz at gocept.com
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