I wish we could! The IRS says we can’t use our website or newsletters to advertise for a for profit business, even if we are getting part of the profits. Below, is a form letter we wrote explaining more about it. There is an actual except from the IRS letter which was sent to us as a pre-condition of getting our 501c3 status. Sorry! Great idea! Robin
Thanks so much for your fundraising suggestion!
Unfortunately the IRS wrote the following words, (see below) specifically to us on their letterhead, as a condition of our acceptance as a 501C3 not-for-profit organization.
The letter came directly from the IRS, addressed specifically to Small Paws Rescue Inc.
The IRS considers any for-profit company to be operating for “private benefit.”
They will not allow SPR to “joint advertise on a website” to “promote the activity of a for-profit” company.
We had an online Home and Garden party going on at the time, with proceeds coming to SPR. The contact person was one of our volunteers, Lisa Isreal, in California.
At the time we applied to be a 501C3 not for profit organization, we also accepted PayPal for donations and adoption fee payments. See below what the IRS wrote to us, about both of these activities.
<IRC 501(C)(3) organizations are organized and operated exclusively for
or more of the following purposes : Charitable, Religious, Educational,
Scientific, or Literary.
Section 1 .501(c)(3)-1(d)(1)(ii) of the regulations states that an
organization is not organized or operated exclusively for one or more
exempt purposes unless it serves a public rather than a private interest .
Thus, to meet the requirements of this subdivision, it is necessary for an
organization to establish that it is not organized or operated for the
benefit of private interests .
The fundraiser for Small Paws Rescue, Inc . appears to be an activity that
would be promoting the private benefit of Lisa K, Israel an independent
designer for Home and Garden Party. if you agree, please provide a
statement that you will discontinue this fundraising activity . If you
disagree, please submit a statement signed by an officer explaining your
position .
In addition, you may wish to include a copy of any pertinent
revenue rulings or court cases you feel will substantiate your position.
Attachment to form 6038
Name: Small Paws Rescue Inc.
Resolution of Issues:
Private Benefit
It appeared from the information submitted that there could be a private benefit resulting from joint advertising on a web site connected with a for profit. There was also some connection with an organization called PayPals.com. They have agreed to discontinue these activites.>
This is the main reason we don’t have sponsors. This is also the main reason we don’t sell advertising.
I know that many other national not-for-profits do have commercial and corporate sponsors, and they do have advertising up on their website.
Because the IRS has specifically instructed SPR in this manor, in writing, we have no choice but to abide by their ruling.