Re: [amsat-bb] AMSAT & Combined Federal Campaign

["Timothy J. Salo" <salo@xxxxxxxxxxx>]

> Date: Thu, 29 Nov 2001 06:57:49 -0600
> Subject: Re: [amsat-bb] AMSAT & Combined Federal Campaign
> From: Jon Ogden <na9d@speakeasy.net>
> 	[...]
> If Amsat were to "sell" an Arrow antenna or Nova, etc., they would be making
> money at it.  Therefore, they'd no longer be "non-profit."  The idea of the
> item being a donation means that a person could give any amount of money in
> exchange for the item.  Yes, it could be taken advantage of (like someone
> "giving" a dollar for an Arrow), but that's the risk one takes as
> non-profit.

I believe that the simple answer is "no".

An easy counter-example is the ARRL.  The ARRL, a not-for-profit,
tax exempt organization, sells stuff; they don't say "Send us a donation
for the ARRL Handbook".  TAPR, another not-for-profit organization,
also appears to sell stuff.

A not-for-profit organization is a corporation chartered under the
not-for-profit section of a state law.  (State laws generally provide
for chartering regular corporations (for-profit corporations),
not-for-profit corporations, and sometimes some other odds and ends.)

State law places constraints on the activities of not-for-profit
organizations.  For example, not-for-profit organizations cannot
pay dividends to their shareholders (never mind that, for example, REI
calls their rebates "dividends").  That is, "not-for-profit" means
"can't pay dividends to shareholders", not "can't sell items for more
than they paid for them".

Most (but not all) not-for-profit organizations also apply for
exemption from Federal taxes, often under section 501(c)(3) of the IRS
code.  Most 501(c)(3) organizations also apply for exemption from
state taxes (which I understand is routinely accepted at the state
level).  Tax exempt status imposes additional constraints on the
organization's activities, such as a prohibition against lobbying.

> Now, from what I understand, non-profits can actually make a profit (there
> are stipulations though on what is done with those profits).  That's why you
> probably see some non-profits "selling" things.  Perhaps AMSAT does not
> distribute its profits correctly in order to "sell" and still be considered
> non-profit. 

I believe that this procedure is an adaptation to state taxes.  It
does, in my limited experience, seem to be an unusual adaptation.

> And then again, just because a non-profit organization "sells" something
> does not mean they are using the proper terminology or even being legally
> correct.

I am not a lawyer, so I don't know what really constitutes a "sale".
But, if anyone tries to donate $1.00 to the ARRL in return for an ARRL
Handbook, please post your experiences.

-tjs
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