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View Diary: Virginia AG Cuccinelli freezes payments to non-profits, says they're "unconstitutional" (162 comments)

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  •  oh, right. (6+ / 0-)

    Its all about the tax revenue.

    But technically, aren't 501(c)(3)'s about being non-profit rather than being "charitable", where "charitable" refers to donation-based funding?  

    I work for a 501(c)(3) that is non-profit but not donor-based, and therefore not charitable in that sense.  And we are in VA.  We have the non-profit tax status, because we don't make a profit, but because we work in predominately public health and human services settings, our mission statement is about these non-financial public sector questions, i.e. providing for the general welfare.

    Again, not your typical 501(c)(3), nor your typical understanding of how that financial entity normally works, but kind of a good example of how the meaning of these things in practice shifts with the evolution of the sectors and the economy.

    Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

    by a gilas girl on Fri Apr 15, 2011 at 02:40:01 PM PDT

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    •  Not really (5+ / 0-)

      Nonprofit is not a tax concept - it has to do with the type of organization you are for state law purposes (typically, but not always, a nonprofit corporation).  You can be a nonprofit under state law and not be tax-exempt for IRS purposes.  Similarly, you actually can be organized understate law in a form that is other than nonprofit (professional corporations and LLCs come to mind) and till be tax exempt under Section 501c3, although it is rare.

      The definition of an organization described in Section 501c3 - is any organization that is organized and operated exclusively for charitable, religious, educational, scientific, literary, public safety or certain amatuer athletic purposes.   The term charitable, as defined in Section 501c3, is used regardless of how funds are raised - it is generally anything that is good for the general public, relieves the burdens of govenrment, helps the oppressed or disadvanted, etc.  

      For IRS Section 501c3 purposes, hospitals and clinics are treated as "charitable" under this section because of the beneifts they provide to the community.  The fact that they charge fees for services doesn't make them less charitable for federal purposes.

      Your point is taken, however, in that the term does shift between state and federal law.  In Illinois, the term "charitable" does not generally include fee-based providers, and there is a whole body of case law on that.  Most recently, the Illinois attorney general has been going after hospitals as not being charitable for property tax purposes.  However, this is due to Illinois state case law and has nothing to do with nonprofit or Section 501c3 status.  

      •  thanks. (2+ / 0-)
        Recommended by:
        Eclectablog, GenXangster

        you answered precisely the question that I needed answered but never directly asked.

        that's a great talent, btw!

        i was just struck by how non-profit and "charitable" seemed to be traveling as synonyms in the Commonwealth's usage.  Apparently that is not uncommon.

        Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

        by a gilas girl on Fri Apr 15, 2011 at 08:22:10 PM PDT

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      •  True. (0+ / 0-)

        Our org. was a 501c3 which made us tax exempt but

        "Warm smell of Moulitsas rising up in the air..." -seanwright

        by GenXangster on Sat Apr 16, 2011 at 07:04:29 AM PDT

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        •  oops...I didnt finish before I (0+ / 0-)

          hit post. LOL

          but...it didn't give us any monies from the state. We raised all our funds through Catholic Charities and private donors.

          "Warm smell of Moulitsas rising up in the air..." -seanwright

          by GenXangster on Sat Apr 16, 2011 at 07:06:14 AM PDT

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