You are here:

Nonprofit Law/Conditions under umbrella

Advertisement


Question
First off, thank you for your time. I am in the process of opening a Preschool in a a small community. There is a non-profit organization that has expressed a desire for me to come under their umbrella. Upon speaking with them, I discovered that they only have interest in the program itself, but will have nothing to do with the property in which the program will run. I am confused as to how this will work. They have no building/space to offer so I would be committing to a 25-30 year loan and, as I understand it, assuming all liability for the property. Somehow, this doesn't seem right. Thank you, again.

Answer
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. Therefore, I am assuming that you are referring to a 501(c)(3) organization. What they seem to be offering you is that their organization will be the operating corporation for the pre-school. It appears that you want to purchase the real property where the preschool will be located and the ownership of that would be in their name also, if you wanted that.  If you individually want to own the property that would be fine, but then you may not then be eligible for real property tax exemptions that are available to certain nonprofits in certain states.  In any case, their Board of Directors would need to have a contract with you as to the funding of the preschool.  Otherwise, their Board would have total control.

If you want to establish your own 501(c)(3) organization, I would be willing to work on the set-up, but I would need to spend a substantial amount of time and that would be beyond the scope of my offer of free services.  If you want to inquire about hiring me for such work, please contact me directly to the email address below.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

Nonprofit Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Harvey Mechanic

Expertise

I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


©2016 About.com. All rights reserved.