Thanks for your thoughtful comments. I agree that speaking the language of companies to compelthem to believe that what is good for everyone is good for them. I'm glad to hear that your experience with Christianity taught stewardship; I believe that is the intent of what is in the Bible--to care for what has been created and given to us. There are certainly environmentally-minded and thoughtful Christians and hopefully more of them every day.
Thanks for your comment Jeff; I'll check out your recommendations. If you can get 50 companies to give 1% and one company to give 50%, you can achieve similar results. Thanks for expanding the conversation; always appreciated. --Kerri
Thanks for calling attention to some positive changes, Geri!
Interested Reader: Thank you for your comments. I don't know everything and certainly welcome corrections if I am making false statements; in this case I don't believe that I am. Your comment does prompt me to provide more clarification of the point.
My original application to the IRS was met with this response: "The financial data provided indicates that there will be a large amount of funds that will remain every year...." The "large amount of funds" totalled $5100. I hope the IRS does allow for something other than a zero balance on original applications for tax-exempt status but my application was delayed because of the initial information I submitted and had to correct to meet their standards.
That's embarrassing. I should know how to spell "entrepreneurs." :)
Thanks Felix. We did consider other options and still would for the future. For Project LACE, the primary advantage as a 501(c)(3) over other models, is the ability to solicit donations with the appeal to our donors that their gifts are tax-deductible. When the IRS took an unreasonable amount of time to evaluate our application, we entertained other options and we could make it work with a "Plan B" structure.
Instead of major donors, we would be soliciting investors but that could limit the scope of services we could provide to those that generate income. For example, we recently received a grant to fund a medical mission trip to Haiti that another nonprofit was unwilling to take because they did not want to assume the risk of liability. That particular service might have gone undone if we weren't able to accept the tax-deductible contribution. We're now planning another medical mission trip which could become an unexpected regular direct service of our organization.
Also, as a 501(c)(3), hopefully we can make some changes from the inside. If I'm as frustrated by the system as the organizations we support are, that will motivate me to be an even more vocal be advocate of change. Project LACE is new and we're learning along the way--we're always looking for good ideas and insights to help guide us and maybe at some point it will be advantageous to revisit our tax status.
I'd love to hear from other social entreprenuers who chose the B-Corp, L3C or straight business route and learn from their experiences.
The nonprofit sector, unfortunately, has its hands tied in a lot of ways that prevent migrating successful business practices to the sector. Some foundations frown on a commission-structure and the Association of Fundraising Professionals considers it unethical.
I recommend the book Uncharitable (which I'm currently reading) for a bigger discussion about why nonprofits struggle to operate like businesses. Like the comments allude to above, we (donors and the general public) frown on NPOs using donated money for certain things like marketing and fundraising which, ultimately, undermines their ability to grow. If someone can spend $10 on marketing or fundraising and make $1,000, why wouldn't they? In the for-profit sector it's a no-brainer. But the non-profit sector fears upsetting their donors who often do ask why they didn't spend that $10 on programming.
Thank you! It's nice to hear someone say something beyond "It's your fault." I'm tired of blaming; it's lazy, inneffective, and perpuates a false sense of powerlessness.
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