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I am surprised that using non profit status to build a business and transferring/converting to for profit down the line isn’t considered a form of tax evasion.
by BehindBlueEyes 3y ago
I am surprised that using non profit status to build a business and transferring/converting to for profit down the line isn’t considered a form of tax evasion.
- Retric 3y agoIt's all about what happens to the money. Many non profits generate revenue from operating a business rather than gift giving. Sesame workshop's deal with HBO and various merchandising deals with Elmo etc on a day to day basis looks a lot like a business, they just reinvest that money into content rather than handing money to investors. Ultimately, most non profits would prefer a giant endowment which can provide them a low risk income stream. Which is why breaking off such ventures is surprisingly common, most of them don't revive 16 billion in outside funding and such media attention. But, again the important bit is what happens to the money / resources. Buy or sell a building, business, or other asset at fair market value and everything is fine.