Ron Gatrelle gatrelle at
Thu Jan 24 00:50:52 EST 2002

There are all kinds of non-profit orgs.  Under 501(c)(3) there are lots of
different structures - from private foundations and public corporations to
churches, bingo parlors, and co-op utilities.  Non profit simply means that
its operating objective is not for profit and is thus granted certain
privelages by the IRS -- it does not mean the entity can not make a profit.
Different types file different types of reports to the IRS, or none - and
some pay some taxes.

Non profits can also create and deal in what is called an "unrelated
business".  This is where the non profit starts a for profit venture
outside its main charter.  This type of business is run and taxed just like
any other business because that is what it is -- it just happens to be
owned by a non profit entity.  For example, the Methodist Church could
purchase and operate Playboy (I know I like absurdity), the circus, or a
local shoe store.  Now depending on how the Church communicated with the
public, one may or may not know of the relationship.  The Church could also
start a for profit Butterfly Park and call it the United Methodist
Butterfly Park.  Depending on how much access anyone had to the specific
articles of incorporation they may just assume the "park" is non profit as
it is _technically_ part of the non profit Church.  It would be a part of
the non profit -- but as an unrelated business operated for profit.  Unless
someone actually reads the fine print, we have no idea what is really going
on in any number of ventures.  Two words:  PTL, ENRON

Ron Gatrelle


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