Q. My understanding is that 501c3 organizations cannot promote a for profit entity or they risk their legal status with the IRS.
Do you happen to have any documentation or IRS correspondence that shows your opportunity has been vetted and would not jeopardize the status of a 501c3 non-profit organization should one choose to participate in the program?
A. Non- profits are complicated and they should always check with their legal department.
A non profit can definitely be part of a commercial co-venture. It is legal, although there could be more specifics state to state to be taken into consideration on the side of the non-profit. In some states there are specific regulations that the non-profit needs to file.
Purium will generate an agreement specifically for each non-profit with our terms of the program. This may be needed for making a filing.
Purium does no advertising on behalf of the non-profit. Part of the reason for the regulation is to protect the non-profit from a corporate organization advertising they are giving x percent to the non-profit, gaining sales and never making the contribution.
In extreme cases where the commercial co-venture fundraising is a largely substantial part of their total funding, it could be considered UBI (Unrelated Business Income) and could possibly be subject to income tax.