Can a desirable for-profit company have fundraisers, accept charity?

Could a for-profit company have fundraisers or accept charity in order to provide or continue to provide a desirable service to the community, or would they have to be a non-profit to do so?

By desirable service I mean things like long term mental health care for teens, or care for brain injured adults, or maybe setting up a hospital in an underserviced part of town or airport in a rural area. Any thing that might be hard for a non-profit to start up or pull off. A for profit company (with some help), may have the resources or pull with local governments, insurance companies, or suppliers to get something done that may never happen otherwise.

I know that for-profit companies might get incentives by municipalities, such as discount rent a property that the city may own, or maybe a tax abatement for a few years to entice a business to set up shop in a certain place, which I guess is a form of charity. I am also not sure how private 4 year colleges are financed- are they considered for profit?

they could but they’d be much better off partnering with a non-profit organisation and donating money to them.

  • the non profit in most cases can purchase supplies at a discount and doesn’t pay tax
  • the profit company gets to claim all donations to the non-profit as a tax write off…

doesn’t make any sense to do it the way you suggest, however the for profit company can use their resources to get media or press coverage for the non-profit… sure.

Certainly they could. The only hindrance is that donations wouldn’t be tax-deductible.

Nearly all private colleges in the US are non-profit, BTW. There are exceptions (the University of Phoenix Online), but they are rare.

Sure they could, and do. The pink ribbon type campaigns for breast cancer, for instance. Those organizations are looking for donations for research, administration, etc. Mental Health organizations are for-profit and come around at least once per year to my house. Same with Heart and Stroke and the Canadian Cancer Society.

A few years ago the veterinarian I take the dogs to had a high profile abuse case that made the local news. People began donating money for the animals care. There was a good outcome. When I brought up the situation he told me the $$ part was a huge pain in the ass. They had to set up an escrow account and use funds from it to cover the cost of the animals treatment. They then had to find a suitable charity to donate the funds remaining in the account after the animal’s treatment was concluded.

Yes, people can do whatever they want (legally) with their money. To repeat and summarize:

How a profit organization handles donations (gifts) is an interesting accounting issue. I imagine it is considered income, just like a gift to an individual. Taxes probably apply, but odds are the business that needs that probably has no profit to tax anyway.

The people giving the gift cannot use it as a charitable donation. That is why a previous poster points out, it makes more sense for a parallel charitable organization to take care of the accepting and disbursing money; however, unles it is for a demonstrably charitable purpoe - say free wheelchairs for the inmates of the for-profit institution, or a large TV for their common room, or special meals - the charity may come under scrutiny. I doubt the rules of a for-charity institution allow it to maintain its charitbale tax status and basically prop up the operating costs of a profit company.

Many people give - as the example of the vet above - with the expectation their money is going to a specific cause; in the example, to pay the medical costs and board of abused animals. Accepting that money and spending it on something else could be fraud. Soliciting and misspending certainly would be. Not keeping good enough records to show it was rightly spent would invite more trouble than you want. Hence the trust-fund/accounting headache mentioned above.

I imagine if too much money came in, as long as the leftover was donated to something similar - care for homeless animals, the SPCA, etc. - ther would be no problem.

But, donating money without strings so mom-and-pop-limited or GMC can stay in business - is not charity…

I want to start a for-profit charity to raise money for local animal shelters but I also want to make money doing it. I’m looking to do this instead of my 2nd job. Is this possible?

I’ve closed this old thread. Start this as a new question.
samclem, moderator