3 ms·

And you would be violating the law.

deleted 4y ago
[deleted]
brookst 4y ago
Not necessarily. Plenty of rich peoples’ charities are incredibly inefficient at their stated purpose, good for their owners, and legal. Consider an imaginary tobacco tycoon’s charity that promotes cigarette use. It would be 100% legal.
- missedthecue 4y ago
  Legal, but it would not qualify for 501c3 tax exempt status.
  - Volundr 4y ago
    Honest question, what would make it illegal? Charities pushing for social change is 100% a thing and I don't think it's limited to such a vague concept as "positive" social change.
    - c22 4y ago
      It's limited to charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. I guess you could argue promoting cigarette use is "educational" or perhaps "religious" if a cigarette-smoking cult existed a la The Leftovers, but I suspect it would be a hard sell in today's environment, given the scientific and social consensus on the dangers of smoking, especially if your day job is selling the things. Maybe you could make it fly by using the funds to buy cigarettes and gift them to the homeless?
- ensignavenger 4y ago
  First, you can't actually "own" a 501c3, you can control it. Second, a 501c3 can be beneficial to its donors or controllers, but: "The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction." A charity that promotes peace on earth may be beneficial to the donors to the charity... but if "optimized for my personal benefit" it is likely to be non-tax-exempt... but I suppose we could debate the exact words used and what they really mean in theory. I think in the above tobacco scenario, the IRS and courts would likely find that the tobacco promotion was merely advertising, and therefore subject to taxation. https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations https://www.irs.gov/charities-non-profits/charitable-organiz...

deleted 4y ago

[deleted]

Not necessarily. Plenty of rich peoples’ charities are incredibly inefficient at their stated purpose, good for their owners, and legal. Consider an imaginary tobacco tycoon’s charity that promotes cigarette use. It would be 100% legal.

missedthecue 4y ago
Legal, but it would not qualify for 501c3 tax exempt status.
- Volundr 4y ago
  Honest question, what would make it illegal? Charities pushing for social change is 100% a thing and I don't think it's limited to such a vague concept as "positive" social change.
  - c22 4y ago
    It's limited to charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. I guess you could argue promoting cigarette use is "educational" or perhaps "religious" if a cigarette-smoking cult existed a la The Leftovers, but I suspect it would be a hard sell in today's environment, given the scientific and social consensus on the dangers of smoking, especially if your day job is selling the things. Maybe you could make it fly by using the funds to buy cigarettes and gift them to the homeless?
ensignavenger 4y ago
First, you can't actually "own" a 501c3, you can control it. Second, a 501c3 can be beneficial to its donors or controllers, but: "The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction." A charity that promotes peace on earth may be beneficial to the donors to the charity... but if "optimized for my personal benefit" it is likely to be non-tax-exempt... but I suppose we could debate the exact words used and what they really mean in theory. I think in the above tobacco scenario, the IRS and courts would likely find that the tobacco promotion was merely advertising, and therefore subject to taxation. https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations https://www.irs.gov/charities-non-profits/charitable-organiz...