What makes MSMAP a 'non-profit'?

 

Non-Profit Details

What makes MSMAP a non-profit organization?

And, what do we mean when we say MSMAP is a “501(c)(c) tax-exempt organization” or something like that?

 

SHORT VERSION: MSMAP is an organization making a charitable contribution to the community — ultimately helping our community become a better place.

This isn’t us just giving out empty talk. MSMAP is recognized by the Internal Revenue Service (IRS) as a charitable organization under Section 501(c)(3) of the U.S. tax code (FEIN: 27-1470306). This IRS recognition makes contributions to public charities such as MSMAP an attractive strategy for reducing taxes because contributions to MSMAP may be tax-deductible. This is correct: donations to MSMAP may be deducted from your tax returns for that tax year depending upon your personal tax situation.

Additionally, MSMAP is a registered charity with the California Attorney General’s office (Reg. No: CT0200211).

Bottom line: MSMAP isn’t a for-profit business, and it certainly isn’t collecting money to put into someone’s pocket so they get rich. MSMAP puts its money to use fulfilling it’s exempt purpose: helping improve our community.

Still not convinced? Check the IRS web site (Publication 78) and the California Office of the California Attorney General’s Registry of Charitable Trusts:
Go to: Exempt Organization Select Check Tool (IRS)
Go to: Search the CA Registry of Charitable Trusts

 
LONG VERSION: “Section 501(c)(3)” refers to a section of the US Internal Revenue Code to set up a charitable corporation (a charitable corporation is a type of company that is set up with the intention of providing a service to the community, rather than making a profit). Incorporating a company makes it a legal entity, responsible for its actions in the community.

In addition, Section 501(c)(3) allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations. The code is regulated and administered by the US Department of Treasury through the Internal Revenue Service.

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Benefits & Restrictions?

MSMAP’s recognition by the IRS comes with specific benefits and restrictions both to the organization as well as to the individuals and other organizations that make donations. This is not a comprehensive list for either category.

 
BENEFITS
Tax-Deductible Donations. Individuals and other organizations that donate to MSMAP can deduct all or part of their donation from their federal income tax returns. Specifically, individuals can deduct up to 50% of the their adjusted gross income. NOTE: Deducting contributions to MSMAP requires the individual to itemize their tax returns.

Tax-Exempt. MSMAP does’t need to pay federal income tax.

 
RESTRICTIONS
Profits. Unlike a private or public for-profit company, the net earnings of the organization cannot be pocketed by any shareholder or individual.

Politics. MSMAP cannot influence legislation as a main part of its activities. However, MSMAP may conduct a limited amount of lobbying based upon a formula involving its overall operating budget. MSMAP cannot be involved in campaigning for or against any candidate for public office.

NOTE: “Lobbying occurs only when there is an expenditure of money by the 501(c)(3) for the purpose of attempting to influence legislation. Where there is no expenditure by the organization for lobbying (such as lobbying by members or volunteers), there is no lobbying by the organization...The right of citizens to petition their government is basic to our democratic way of life, and associations, including 501(c)(3)s, are one of the most effective vehicles for making use of citizen participation in shaping public policy. Fortunately, the legislation passed by Congress in 1976 makes it possible for 501(c)(3)s to lobby freely for the causes, communities and constituencies they serve...Finally, by not engaging in lobbying, your organization may be failing to employ a very important activity that could be enormously helpful in carrying out its mission.”

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Explanations

Nonprofit, 501(c)(3), & tax-exempt don’t mean the same thing.

Nonprofit means the entity, usually a corporation, is organized for a nonprofit purpose.

501(c)(3) means a nonprofit organization that has been recognized by the IRS as being tax-exempt by virtue of its charitable programs.

Tax-exemption is the result of a nonprofit organization being recognized by the IRS as being organized for any purpose allowable under 501(c)(3) - 501(c)(27).
 

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More Information

What is a 501(c)(3)? (Foundation Group)
What is a 501(c)3? (wiseGEEK)
Does nonprofit, 501c3, and tax-exempt all mean the-same thing? (Foundation Group)
Charitable Donation Tax Deductions (Better Business Bureau)
Exemption Requirements - Section 501(c)(3) Organizations (Internal Revenue Service)
Top Ten Myths about 501(c)(3) Lobbying and Political Activity (The Center for Association Leadership)
501(c) organization (Wikipedia)
 

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