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Nonprofit Law/establishing a non-profit


We are looking into incorporating our local farmer's market as a non-profit.  Our only sources of "income" as an entity are annual membership dues ($20) and weekly set-up fees ($5).  Our vendors grow/ produce their wares and keep all of their earnings. Our "income" is used for advertising, grounds maintenance & donations to related organizations & causes.  First, would we qualify as a non-profit corporation; second, would we be a 501c5?  Thanks for your help.

Answer is information about such organizations provided by the IRS.

note , "Reg. 1.501(c)(5)1(a)(1) prohibits the inurement of earnings to the benefit of any member of the IRC 501(c)(5) organization."  Therefore, your donations would not be going to members.

Also "[[T]he organization must have as its primary purpose the betterment of the conditions of those engaged in agricultural pursuits." It does not appear that your organization, would, therefore, qualify.

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.  I gave you some basic information about c5 (and you would definitely not qualify for c3 status.  I would be willing to work on your matter, but I would need to spend a substantial amount of time analyzing your operation and considering all of the different types of nonprofits 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 -

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.  

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Harvey Mechanic


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 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 "" without the quotes and then add your search terms before hitting enter.


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.


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

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

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