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Re: [Fenfire-dev] non-profit association vs. co-operative

From: Benja Fallenstein
Subject: Re: [Fenfire-dev] non-profit association vs. co-operative
Date: Fri, 11 Jun 2004 00:19:46 +0300
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Antti-Juhani Kaijanaho wrote:
| On 20040610T161558+0300, Matti Katila wrote:
|>And I must correct that all donations are not tax-deductible in Finland
|>because they don't improve trade.  The association can give donations
| You're not making sense.  Donations are not tax-deductible except that
| they are?

What's meant is that donations the association *receives* are not
tax-deductible (first sentence), but donations the association *grants*
may be (second sentence).

I'm not sure it's correct, but not self-contradictory at least =)

| Certain "IRS"-cerified charities can take donations that are
| tax-deductible to the donor.

That's the part I was interested in. I guess that the qualification is
the same you talk about below with regard to the association paying
taxes on donations it receives (the association must be "charitable")?

This is one thing that would give being a (charitable) association an
advantage over being a co-op.

|>I do understand that. With association we need to pay taxes to get
|>from members if we don't use membership fee.
| Uhh, what?  I've never heard of a charitable association having to pay
| taxes on free gifts (freely given, that is) it receives.
| In fact, I just rechecked the facts, and charities do not pay taxes on
| gifts it receives.  To be counted as a charity, the following must be
| true of an association:
|    1) Its sole motivation on all its operations is direct common good
|       materially, spiritually ("henkisessä mielessä"), educationally
|       ("siveellisessä mielessä") or socially ("yhteiskunnallisessa
|       mielessä"). [Translations are rough where the original phrase is
|       indicated.]

Which one would we fit into here?

|    2) Its activities are not limited to a particular set of people.
|       (This means, for example, that membership must be open to anybody
|       who agrees with the goals, not only to for example people called
|       Kaijanaho:)

Do we have any way to kick out or reject membership applications from
people who we feel are damaging to the project? I.e., can we assure that
the association isn't taken over by people who want to do something very
different with it? (Maybe '...who agrees with the goals' can help here?)

|    3) It does not bring profit through dividends to those involved, not
|       counting fair compensation for work done for the association.

That one's easy.

| I think a Fenfire association would qualify.

If we qualify for 1)...

| (However, even a charity pays taxes for business income.)


- - Benja
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