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E-commerice for Non-profits

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Greenberg

Junior Member
What is the name of your state? Arizona


E-commerce and Charitable 501c3 Organizations (NGOs).
• The Bureau of Applied Research in Anthropology, (University of Arizona) e-development project is exploring what role e-commerce may play in helping charitable Non-government organizations (501c3) fund development work overseas. As part of this work we are trying to understand what tax liabilities and incentives may apply.
• No work has yet been undertaken. We are researching models at this point. Names used while CARE and AMAZON are real, no ageements have been made, and they are only being used for illustration.
The basic model
An NGO such as Care International buys crafts from local villagers.
• This provides them will income
• The NGO undertakes to sell these crafts, and uses profits made to fund development projects, and maintain and expand craft purchases.
• Since the NGO is a non-profit, and profits from sales are being used to fund its activities, it is assumed that there is no federal tax liability (although state sales taxes, import duties) may apply. Is this correct?
Variation 1
An NGO such as Care forms an agreement with a for Profit corporation such as Amazon.com for sale of these crafts
• Under this agreement Care provides the crafts and Amazon sells them, profits form their sale are split with CARE.
• Question: Can AMAZON write off as a charitable contribution the portion of the profits it splits with CARE?
Variation 2
• Amazon makes a donation of $1000 to CARE -- and receives crafts as thank you gifts.
• Amazon then sells these crafts and makes a $1500 profit.
Question: Can Amazon take a charitable deduction of the $1000 or portion of it.
• We assume taxes would apply to profits. Is this correct?
Variation 3
• Amazon makes a donation of $1000 to CARE -- and receives crafts as thank you gifts.Amazon gives these crafts as gifts to clients and business associates
• Question: Can it deduct both the donation to care, and the gifts to associates?

Dr. James B. Greenberg
 
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