In another thread, TubaDiva said:
My reaction to this was “Huh?” Is it really illegal for a corporation to accept charity? Was there a qualifation that she didn’t include like “a company cannot solicit charity”? How exactly is charity defined? Any consideration given without anything of value given in return (in which case homeopathy companies seem to be violating the law)? I take it this doesn’t apply to charity from the government (cough [sub]Chrysler bailout[/sub] cough)?
Actually, this is one of those annoying grey areas in law that are so problematic no one wants to mess with them. IANAL (hell, at this point IANES [I Am Not Even Sober]), but what it boils down to is that if someone were to donate (or chip in money towards) a new server, the IRS would show up and make so many demands on the Reader about who gave it to them, and how the whole thing’s going to be handled on their taxes that the legal bills would total more than the cost of the new server. There was a slightly similar case a number of years ago with a radio station. It was a small station with low ratings and was going to have to go off the air because it could no longer afford to pay its DJs. What happened is that there were tons of people in the community who loved the station (it was the only Jazz station in the area IIRC) and they volunteered their time to work as DJs rather than see the station go under. The Dept. of Labor got wind of this and took the station to court saying that people couldn’t volunteer to work for a for-profit corporation and that the station would have to pay wages to the volunteer DJs. The court ruled in favor of the radio station and against the Dept. of Labor, so the station got to stay on the air, and everyone, except the pencil pushers at the Dept. of Labor was happy.
If the Reader’s like my local alternative paper (which, if I’m not mistaken the Reader owns, but doesn’t bother to put Cecil’s column in for some unknown reason), then they’ve got enough headaches dealing with all the lawsuits that come about from dealing with legitimite news stories, that they don’t need the added headache another one would bring.
AFAIK Chrysler got a loan which it repaid ahead of schedule. I am not sure I would call that charity, although, cough, cough, you can define charity any way you like.
Corporations refcieve billions of dollars each year in the form of charitable tax right offs, loans, money to relocate, money for promising jobs… I’m not saying it’s all bad, but to imply companies don’t receive tons of breaks is to misunderstand capitalism.
>> Corporations refcieve billions of dollars each year in the form of charitable tax right offs, loans, money to relocate, money for promising jobs
I don’t know where to begin. Right offs as opposed to right ons? Or as opposed to wrong offs?
Or ahould I assume you meant “write off”. Do you have the faintest clue as to what this means? A company “writes off” and asset (from the books) when it finishes amortizing it. I have no idea why you would say a company receives money from the government for this. If you mean because it is a legitimate business deduction, I still don’t get it. Of course a company is allowed to deduct its expenses. How else could they do business? Would you favor a tax scheme where taxes were paid on gross income regardless of expenses?
Or are you saying that the mere fact that the government lets you keep anything is a gift from the government since they could take it all? Do you consider any deductions you get from your taxes as a gift from the government? Would you consider that everybody who claims a deduction for interest paid on their mortgage is receiving welfare?
Next point: Loans. Huh? Receiving a loan is a gift? Do you realize the difference is that a loan has to be paid back?
Money to relocate, money for promising jobs. I am not sure what you mean by this so I would ask you to explain and provide some examples. In fact, I may have entirely misunderstood your post Dr_Paprika in which case I would ask you to clarify.
Regarding the OP: (I) I believe any company or individual can legally accept any gift as long it is not specifically barred by law (like government workers). I do not believe the word “charitable” makes any difference to the receiver. What it may mean is that if the receiver falls into certain categories, then the donor may get some tax deduxtion. You see this is the solicitations you get from non-profits: “your donation is tax deductible … etc”
On the other hand, corporations are often permitted to liquidate government loans early without penalty and without having to pay the interest that would have accumulated. Individuals and consumers are rarely given this option. I cannot say whether this is sound policy or not, as I am not informed enough on the topic.
It isn’t at all uncommon for businesses to be given development loans and/or property tax abatements of up to 100% for anywhere from ten years to in perpetuity in exchange for building new facilities in a municipality and promising to hire X% of new workers locally.
pldennison says:
On the other hand, corporations are often permitted to liquidate government loans early without penalty and without having to pay the interest that would have accumulated. Individuals and consumers are rarely given this option. I cannot say whether this is sound policy or not, as I am not informed enough on the topic.
I relpy:
What consumer loans are we talking about here? Home Mortgages can be paid off without penalty by law. The car loans I have had can be paid off early without penalty.
I think the problem the radio station ran into was not that it was accepting free gifts, but that it was doing something that the Labor Department thought was a violation of labor laws. As far as I know there wouldn’t be any problem with the Reader accepting contributions; however, you woulnd’t be able to deduct those contributions from your taxes because the Reader is not a charity.
Dr_Paprika went too far in saying that “to imply companies don’t receive tons of breaks is to misunderstand capitalism.” Some companies do get tax breaks, mostly in the form of waivers to local property taxes, as incentives to locate in some locations. But this is an exception, and isn’t germane to an understanding of capitalism.
Sailor, you jumped on him too harshly. You knew what he was referring to when he misspelled write-off, that he meant tax breaks in general.
Um, getting back to the OP, I suspect that to what TubaDiva was referring is that there are accounting consequences for the Reader when it collects money; i.e. it is income and has to be accounted for as such, etc. Decisions on how to spend the income have to be made according to the company’s by-laws, and shareholders can expect their share of the income as dividends or re-invested profits.
Of course, we could establish the non-profit Straight Dope Message Board Foundation, obtain contributions then set up a grant process for which the Reader could apply… 
>> corporations are often permitted to liquidate government loans early without penalty and without having to pay the interest that would have accumulated. Individuals and consumers are rarely given this option.
pldennison, I believe you are quite mistaken. Could you provide some examples?
DSYoungEsq I believe may be on the right path. You can give money to the Reader with no strings attached and they will probably accept it. But if you say, “this has to be spent on such and such” they would probably say “write us a proposal we can present at the next shareholder’s meeting”.
It seems like what you’re saying that it’s not just that it’s a corporation, but that it’s a publicly held corporation. Is that correct?
Why not sell : “I have my life back because I do not need to wait on the SDMB to load!!” T-Shirts and charge, say $50, for them. Of course the Board of the reader could take that money and pay dividends, but I think we can trust 'em.
A corporation does not have to be publicly held to have shares - it can be privately held, with a single shareholder, and still have dividends paid. One of the technical differences will be whether it is a non-profit corporation - if the Articles and Bylaws aren’t set up this way, with the non-profit status set at formation, then all the profits they get - including contributions and dimes found in the street - go into a big bucket, and must be accounted for. They’ll be paying taxes on the income, as well.
So if we got really generous, and convinced them to spend the newly acquired profits on a new server, we might be able to do significant financial damage in tax liability. Just another way of bringing the system to its knees by working from within.