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    4 Replies Latest reply on Mar 26, 2008 8:30 PM by jrmajos

    can a for-profit accept donations?

    jrmajos Newbie
      I teach baton twirling at area schools and considered a for profit business. I have have had parents ask if they can sponsor our team by donating cash, or if they can solicit donations from area businesses.I have seen other studios do this and list them in their annual recital program- like they are purchasing ad space. Is this a legit way of fundraising for my team? All money would be kept in a seperate account.
        • Re: can a for-profit accept donations?
          LUCKIEST Guide
          Good question and welcome to this web site.
          Can a for-profit accept donations??
          A donation is a gift given, typically to a cause or/and for charitable purposes.
          A donation may take various forms, including cash, services, new or used goods .
          how long have you been in business??
          Do you have an Accountant?? A Lawyer??
          Now is the time to ask the professionals. they know you and your business.
          Good luck, LUCKIEST
          • Re: can a for-profit accept donations?
            Lighthouse24 Ranger

            Toscanini's in Cambridge, MA was seized by the state for failing to pay payroll taxes -- and started a "Save Toscanini's" campaign on the web. They raised something like $34K+ through PayPal donations (story ran in the Boston Globe and New York Times, maybe a month or so ago?). So yes, a for-profit business can accept donations, but be very careful about parents doing this on your behalf -- perhaps allow them to solicit the donation, but not actually collect the money (instead, have them direct interested donors to a website where they can clearly see what they are giving money to, and understand that their donation is not tax deductible).

            I think where you'd run into trouble is if donors feel deceived or misled (either intentionally or inadvertently) by the solicitation process. In fact, you might not even want to think of this in terms of donations and fundraising at all, but rather as "sponsorships" -- the way a merchandiser pays NASCAR to be the "official whatever" of that organization, you would be selling sponsorships (and the buyer would essentially be setting the price). You might even create a banner to display at your place of business that shows the names or logos of your sponsors -- because they'd be getting something tangible in exchange then.

            Hope this helps. Best wishes.
            • Re: can a for-profit accept donations?
              nMoncrief Adventurer
              This much I know: any business can accept donations, but only donations to non-profits can be considered tax-deductible. If your donors can't deduct their donations from their taxable income, it removes much of their incentive to donate. I don't claim to be a tax professional. You should consult your CPA for tax advice. Hope this helps!

              Neil Moncrief
              • Re: can a for-profit accept donations?
                jrmajos Newbie
                Thanks! I actually talked to my CPA today and he said pretty much the same thing. As long as I show the sponsorships as income and run it thru my books I'm ok. And to stay away from the word "donation" as it can mislead people to tax deductions that aren't available. Thanks again!