For Profit vs Not for Profit

For Profit vs Not for Profit - For Profit Vs Not for Profit...

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For Profit Vs. Not for Profit That is the Question
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Organizations Typically NFP Theaters Film Societies Symphonies, Chamber Music Groups, Choral Groups
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Why 501 c 3 Exemption requires organization owned and operated for the following purposes: Charitable, Religious, Educational, Scientific, Literary, Testing following guidelines of 501 C 2 or 501 c 6 or 501c7 (c6 and c7 for Business Leagues or Social Clubs)
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501 c 3 Limitations Organizations required to operate exclusively for purposes stated in IRS such as to “Promote Theater” Application. No shareholders or single individual to benefit. Assets upon liquidation must belong to organization
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501 c 3 Advantages Ellibible for Grants Discounts with many Advertising sources: Newspapers, TV, Radio Elligibility as a PSA Donations elligible for tax exemption Access to Individuals who are willing to assist via board membership, etc
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Disadvantages Requires a broad purpose that can be contrary effective to Business Strategies. Limits or Restrictions on Bonuses for Performance or success Completion with other Not for Profits (why should we give to the arts when there are hungry, or more deserving N-F-P’s)
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For Profit Disadvantages Raising Private funds via investment requires Securities Compliance. Legal costs can be substantial. Intestors can potentially sue “Partners” if they feel insufficient disclosure wasn’t in evidence.
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