I am an L3C which is basically an LLC for tax purposes. My L3C is
educational. I would like to create a non-profit to collect donations for
student scholarships, field trip fundraisers, and extracurricular club
fundings. The reason is because I would like to incentivize donations to
these activities as tax deductible. I also don't want to count these items as
profit when they really aren't business profits. I understand that the
non-profit must operate independantly from the L3C. I have been trying to
reach out to lawyers with no help. 1. Does anyone know if this is possible?
2. Which type of non-profit would this be considered? 3. Could be use the
non-profit to support only my students at this program or does it have to
offer scholarships to the public? -- I have tried reading the IRS web site
but don't fully grasps their content. Thanks.
Marc J. Lane | Window Shopper |
11/5/2012 - 7:58 pm
Indeed it is possible. In fact, about half the nation's L3Cs operate in tandem with nonprofit organizations. I'm an attorney and financial advisor who drafted Illinois' L3C law and had a hand in others, and I'll be delighted to help you. Marc Lane
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Non-profits are established by the IRS. There is much information on their
web site about the types of activities that qualify for non-profit status.
Generally, if you limit the scope of the people you help (in your case, only
your students), then you don't qualify for non-profit status. You may want to
visit with a counselor at a small business development center or a SCORE
office. They can provide advice, and if you qualify, direct you to an
attorney to file the necessary paperwork. Their services are free.
Marc J. Lane | Window Shopper | 11/5/2012 - 7:58 pm
BizResearcher | Window Shopper | 5/22/2012 - 12:02 pm
web site about the types of activities that qualify for non-profit status.
Generally, if you limit the scope of the people you help (in your case, only
your students), then you don't qualify for non-profit status. You may want to
visit with a counselor at a small business development center or a SCORE
office. They can provide advice, and if you qualify, direct you to an
attorney to file the necessary paperwork. Their services are free.
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