Alceste1978
Junior Member
What is the name of your state (only U.S. law)? Florida
I am considering starting a new business which will collect donations (online, primarily) and then re-donate a percentage of the collected donations to other charities. I am wondering if I should attempt to apply as a not-for-profit organization or not, among other things.
For example, the business model may work like this: The business could serve as a tool to generate interest in online charity by having a monthly "lottery" which selects which charity will receive the funds. I.e. collect 10,000$ in donations, and then have a drawing which chooses the charity that "wins". Basically a charity middleman, which only "profits" enough for operating costs.
Which begs the questions:
Would donations to such a organization/business be tax deductible, since those that donate would not be directly giving to a charity, but to a charity "funnel"?
Would the organization's "income" be taxed fully, or only the "profits"? In other words, if you raised 10,000$ in one year, and then donated 9,000$ of that to an established non-profit entity...what would you get taxed on? Just 1000$? Or all of it?
Would such a project even feasibly be considered by the IRS for tax-exempt status?
Any advice or direction to useful research resources would be greatly appreciated.
I am considering starting a new business which will collect donations (online, primarily) and then re-donate a percentage of the collected donations to other charities. I am wondering if I should attempt to apply as a not-for-profit organization or not, among other things.
For example, the business model may work like this: The business could serve as a tool to generate interest in online charity by having a monthly "lottery" which selects which charity will receive the funds. I.e. collect 10,000$ in donations, and then have a drawing which chooses the charity that "wins". Basically a charity middleman, which only "profits" enough for operating costs.
Which begs the questions:
Would donations to such a organization/business be tax deductible, since those that donate would not be directly giving to a charity, but to a charity "funnel"?
Would the organization's "income" be taxed fully, or only the "profits"? In other words, if you raised 10,000$ in one year, and then donated 9,000$ of that to an established non-profit entity...what would you get taxed on? Just 1000$? Or all of it?
Would such a project even feasibly be considered by the IRS for tax-exempt status?
Any advice or direction to useful research resources would be greatly appreciated.