Non-charity charity

[Scotii]

What is the name of your state (only U.S. law)? Ohio. Can I operate a business that operates on donations, uses those donations for environmental protection that also happens to benefit people directly, but not call it a charity? Could, for example, the donations be "membership payments" to a "club"? Could the expenditures be labeled as something like philanthropy, etc.? I know this sounds shady, but I'd like to start an environmental movement that is as simple as possible (read efficient), with as little government intervention as possible.

 

[justalayman]

What is the name of your state (only U.S. law)? Ohio. Can I operate a business that operates on donations, uses those donations for environmental protection that also happens to benefit people directly, but not call it a charity? Could, for example, the donations be "membership payments" to a "club"? Could the expenditures be labeled as something like philanthropy, etc.? I know this sounds shady, but I'd like to start an environmental movement that is as simple as possible (read efficient), with as little government intervention as possible.

Sure you could. Of course you would have to figure and pay your taxes just like any other business would. Playing like you are a charitable organization does not mean you get to act like one without the proper approval by the state and federal taxing entities along with the proper registration and continued oversight by those agencies.

 

[Scotii]

Sure you could. Of course you would have to figure and pay your taxes just like any other business would. Playing like you are a charitable organization does not mean you get to act like one without the proper approval by the state and federal taxing entities along with the proper registration and continued oversight by those agencies.

In other words I can't get around all the beurocratic bs? No alternate or out of the box structuring? Does it not matter that I'm not claiming to be a charity?

Are you a business attorney?

 

[Scotii]

What technically constitutes a charity? I have no problems with paying taxes and no problem being transparent with my donors. What I have a problem with, is the over complication, and especially the cost, of compliance. I'd like to start off slow, grow steady, grass-roots. Kinda hard to do when you have to have a whole team to pay for just to keep out of jail.

 

[justalayman]

I suspect you refer to a not for profit organization when you say charity. The problem you have that by default, corporations are "for profit" entities in the eyes of the law. To be recognized as a nfpo you have to apply for and being acknowledged as a nfpo. Without that official recognitition you will be considered a fpo.


While a fpo organization can end up paying little in the line of taxes it is the result of their profits and losses of operation.

In either case you have to record your transactions and file tax returns. Yes, you are attempting to evade those requirements and yes, it results in an appearance of being shady as the only way to do what you want without being required to comply with the laws in place is by using shady activities to hide your business transactions.

I suggest you need to be more concerned about needing a criminal legal defense team in that situation than being compliant with the laws in place where at most you may need an attorney to deal with the civil tax issues you may face.


And to your question of my status; I claim nothing more than my user name states. But to be more open, no, I am not an attorney, of any sort.

 

[FlyingRon]

I think you're way overworrying about this. First off, there's hardly a difference in the ongoing efforts (tax, etc...) for a non-profit than for a profit. Even if you establish yourself as a IRS recognized 501(c) charity, it's pretty straightforward. You'll probably need an attorney to make sure your articles of incorporate, etc...are in line with the IRS requirements, but the actual filing for that status and the annual filings afterwards are something you can often handle yourself. In fact, if you don't have more than $50K in gross receipts it's trivial. Until you get up to $200,000 of gross receipts (or a half a million in assets) it's still not all that involved.

If you're pulling in more than that, you can probably afford a couple of thousand to pay a CPA or whatever to make sure ALL your books are right and tax filings made.