Tuesday, September 5, 2017
Michael Sanders has published Practical Issues Facing Nonprofits Structuring New Market Tax Credit Deal, 29 Tax'n Exempts (2017).
In this article, Michael Sanders explores a new solution to the lack of funding problem plaguing many nonprofit organizations today. These nonprofits have created a new business model by partnering with for-profit companies in order to raise their much-needed funds. Consequently, the IRS has updated its guidelines to govern these new partnerships. The nonprofit’s tax exemption status will not be in jeopardy as long as “they have sufficient control to ensure that the venture will further the nonprofit’s exempt purposes and there will be no impermissible private benefit or inurement.” One of the best examples of these joint ventures is the New Market Tax Credit program, where “for-profit investors subsidize development in distressed communities with high poverty or unemployment to generate economic growth and opportunity.” In return for their funding the for-profit organizations will receive a 39% tax credit. Read more about this exciting innovation at: https://www.blankrome.com/index.cfm?contentID=37&itemID=4320