4 ms·

> not-for-profits drift from their roots, in one case, even selling all similar assets and rights to a for-profit that is a neat trick, since a non-profit cann

> not-for-profits drift from their roots, in one case, even selling all similar assets and rights to a for-profit that is a neat trick, since a non-profit cannot own and sell assets like that, that I know of, in the USA. details? hogwash?

bawolff 5y ago
Non-profits can sell assets if its in accordance with their mission. Why wouldn't they be able to?
- mikeyouse 5y ago
  They can sell them if not in accordance with their mission by paying taxes on the sale as well (UBIT). There are very few restrictions on what a nonprofit can and can’t do. https://www.councilofnonprofits.org/tools-resources/unrelated-business-income-taxation https://www.councilofnonprofits.org/tools-resources/unrelate...
  - mistrial9 5y ago
    in the USA ? that is absolutely not true.. could an actual experienced attorney please look into this ... I think you people are confused about "selling t-shirts" versus disposal of actual assets.
    - samatman 5y ago
      I think you're confused about what an asset is. Be it a T-shirt, a building, or IP, if a nonprofit owns it they can sell or license it.
ceph_ 5y ago
Non-profits can absolutely sell assets to for-profit institutions. See: Every non-profit that sells things. Or for a nefarious but legal example, see the attempted selling off the rights to the .org TLD rights by ICANN. https://thenextweb.com/news/hurray-the-org-tld-wont-be-sold-off-to-a-private-company https://thenextweb.com/news/hurray-the-org-tld-wont-be-sold-...
lokar 5y ago
Search for "deaccession" as an example
- mistrial9 5y ago
  this is probably reasonable .. the others are less so
  - lokar 5y ago
    I could imagine: "In order to raise money to protect free software we have to transfer this one license to Oracle"
    - mistrial9 5y ago
      yes, that might be a danger given the context. agree. I would like an opinion about transfer of assets from 501(c)x to a (edit) for-profit corporation though.. some of these statements are just not true in the articles of non-profit taxation, last I looked into it.
      - dragonwriter 5y ago
        > I would like an opinion about transfer of assets from 501(c)x to a corporation though Most 501c entities are corporations. You probably mean “to a business entity that is not itself a 501c”, but generally a 501c is free to sell assets to other entities without regard to form or (absence of) nonprofit status, though there are other restrictions that might come into play.
      - mistrial9 5y ago
        people here do not understand that a for-profit company seeks to avoid or minimize tax, and that simple flipping of (appreciating) assets from a non-profit and back could be used extensively to avoid tax ? and that the IRS specifically precludes that, in the articles of non-profit incorporation? not "selling t-shirts or anything else in line with the mission" but held assets? there is some term I am missing, and I think Commonwealth countries are also taking turns here.. there is too much distance in the points of view .. there have to be some assumptions unsaid
mistrial9 5y ago
blatent contradictory statements here, without substantiation.. Do I have to find the legal documents on demand of this thread? this is USA non-profit law that is being discussed? settled law ?
- cmeacham98 5y ago
  The only contradictions here are basically every commenter contradicting your (obviously incorrect) assertion that non-profits cannot sell assets to for-profit entities in the US. When you make the claim, you are generally expected to provide proof, yes that's how it works.
  - mistrial9 5y ago
    start here? https://www.irs.gov/charities-non-profits/private-foundations/transfer-of-assets-to-a-public-charity-private-foundation-termination https://www.irs.gov/charities-non-profits/private-foundation...
    - cmeacham98 5y ago
      Can you please quote the part of that document that you think substantiates your claim? All I found was unrelated information about the "termination of a private foundation". The words 'sale' and 'sell' appear zero times in the whole page.
blagie 5y ago
The example I know of, I can't talk about. What happened was likely illegal, but in the grey zone. Individuals profited to the tune of millions individually, and the transaction was in the hundreds of millions. Law enforcement never got involved, so I'll never know what a court might have decided. However, I'd encourage you to look into hospitals, industry groups like the RIAA, family foundations like the Trump Foundation, and similar organizations. You can find your own examples easily enough. That's not to mention non-profits hijacked for new purposes (e.g. the current move away from founding values to woke values for a few organizations that's been bugging HN commentators lately). (And yes, I do know the difference between a 501(c)3, 501(c)6, family foundation, etc).
- mistrial9 5y ago
  > What happened was likely illegal, but in the grey zone. this

bawolff 5y ago

Non-profits can sell assets if its in accordance with their mission. Why wouldn't they be able to?

mikeyouse 5y ago
They can sell them if not in accordance with their mission by paying taxes on the sale as well (UBIT). There are very few restrictions on what a nonprofit can and can’t do. https://www.councilofnonprofits.org/tools-resources/unrelated-business-income-taxation https://www.councilofnonprofits.org/tools-resources/unrelate...
- mistrial9 5y ago
  in the USA ? that is absolutely not true.. could an actual experienced attorney please look into this ... I think you people are confused about "selling t-shirts" versus disposal of actual assets.
  - samatman 5y ago
    I think you're confused about what an asset is. Be it a T-shirt, a building, or IP, if a nonprofit owns it they can sell or license it.

ceph_ 5y ago

Non-profits can absolutely sell assets to for-profit institutions. See: Every non-profit that sells things. Or for a nefarious but legal example, see the attempted selling off the rights to the .org TLD rights by ICANN. https://thenextweb.com/news/hurray-the-org-tld-wont-be-sold-off-to-a-private-company https://thenextweb.com/news/hurray-the-org-tld-wont-be-sold-...

lokar 5y ago

Search for "deaccession" as an example

mistrial9 5y ago
this is probably reasonable .. the others are less so
- lokar 5y ago
  I could imagine: "In order to raise money to protect free software we have to transfer this one license to Oracle"
  - mistrial9 5y ago
    yes, that might be a danger given the context. agree. I would like an opinion about transfer of assets from 501(c)x to a (edit) for-profit corporation though.. some of these statements are just not true in the articles of non-profit taxation, last I looked into it.
    - dragonwriter 5y ago
      > I would like an opinion about transfer of assets from 501(c)x to a corporation though Most 501c entities are corporations. You probably mean “to a business entity that is not itself a 501c”, but generally a 501c is free to sell assets to other entities without regard to form or (absence of) nonprofit status, though there are other restrictions that might come into play.
    - mistrial9 5y ago
      people here do not understand that a for-profit company seeks to avoid or minimize tax, and that simple flipping of (appreciating) assets from a non-profit and back could be used extensively to avoid tax ? and that the IRS specifically precludes that, in the articles of non-profit incorporation? not "selling t-shirts or anything else in line with the mission" but held assets? there is some term I am missing, and I think Commonwealth countries are also taking turns here.. there is too much distance in the points of view .. there have to be some assumptions unsaid

mistrial9 5y ago

blatent contradictory statements here, without substantiation.. Do I have to find the legal documents on demand of this thread? this is USA non-profit law that is being discussed? settled law ?

cmeacham98 5y ago
The only contradictions here are basically every commenter contradicting your (obviously incorrect) assertion that non-profits cannot sell assets to for-profit entities in the US. When you make the claim, you are generally expected to provide proof, yes that's how it works.
- mistrial9 5y ago
  start here? https://www.irs.gov/charities-non-profits/private-foundations/transfer-of-assets-to-a-public-charity-private-foundation-termination https://www.irs.gov/charities-non-profits/private-foundation...
  - cmeacham98 5y ago
    Can you please quote the part of that document that you think substantiates your claim? All I found was unrelated information about the "termination of a private foundation". The words 'sale' and 'sell' appear zero times in the whole page.

blagie 5y ago

The example I know of, I can't talk about. What happened was likely illegal, but in the grey zone. Individuals profited to the tune of millions individually, and the transaction was in the hundreds of millions. Law enforcement never got involved, so I'll never know what a court might have decided. However, I'd encourage you to look into hospitals, industry groups like the RIAA, family foundations like the Trump Foundation, and similar organizations. You can find your own examples easily enough. That's not to mention non-profits hijacked for new purposes (e.g. the current move away from founding values to woke values for a few organizations that's been bugging HN commentators lately). (And yes, I do know the difference between a 501(c)3, 501(c)6, family foundation, etc).

mistrial9 5y ago
> What happened was likely illegal, but in the grey zone. this