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Re: [newtech-1] LLC + 501c3 question

From: Stuart D.
Sent on: Sunday, March 17, 2013 9:44 PM

You likely know this, but a not-for-profit without 501(c)(3) status is not tax-exempt.

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-----Original message-----
From: Anthony Zeoli <[address removed]>
[address removed]
Mon, Mar 18,[masked]:33:43 GMT+00:00
Re: [newtech-1] LLC + 501c3 question


I've been looking also into L3C status, which is now available in North Carolina.

To your examples, I know that the Wordpress Foundation is inspired by Mozilla. The WPF is a 501(c)3 and Automattic, Inc is a for profit. I don't know any more than that, but if WPF is a non-profit, then I'd like to model what I do after what they do.

I understand that I would be the "organizer" and not an "owner." I didn't know that MF owns MF Corporation and that the profits flow up to MF to fund it after taxes are paid.

Automattic accepted investment from the NYTimes and I'm sure there are US citizens who contribute to Wordpress outside of any grants they receive.

My goal is to accept donations or grants to help pay the staffers who support the open source project for the Foundation. I'd like to run Netmix Media as the for profit, in the same way Automattic, Acquia or RedHat support their clients using each respective open source software.


On Sun, Mar 17, 2013 at 12:29 AM, Jeffrey Altman (SecureEndpoints) <[address removed]> wrote:

There are no fast and hard rules that state when the IRS must approve a
not-for-profit corporation as a public benefit charity, 501(c)(3).  If
all you want is not-for-profit status that does not require the blessing
of the IRS.

I think a fundamental question to answer is "what are your goals for the
NFP organization?"

Are you looking to have control and if so, over which entity?

There are a number of different models.  For example, the Mozilla
Foundation is a NFP that owns Mozilla Corporation and all profits of the
for-profit corporation flow to the Foundation after taxes are paid.

The OpenSSL Foundation is simply a for-profit corporation that collects
money to help support the income of the core developers:

The primary benefit of 501(c)(3) status is the ability to accept
charitable donations from U.S. citizens or grants from other 501(c)(3)
organizations.  If you expect that most of your donations would come
from corporations or non-U.S. citizens or U.S. citizens that don't care
about the tax deduction, I wouldn't bother.

Jeffrey Altman

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