Nonprofit or For-Profit Business | Can You Have Both?

[@ICUSocialWorker]

I own a C. Corp. A C. Corp is the only way you will get any big-time investors to invest in your business. They also require a C. Corp due to tax laws and the benefit to the Delaware C. Corp. Also, they must incorporate the Delaware C. Corp in the state of Delaware if they re seeking investment from investors. C. Corp provides stock options meaning you grant ownership to investors meaning they are more likely to invest in the business. They do not want to invest in an LLC which has no value to them in the end.

[@motleyassortment5512]

Why people make things so complicsted just so you can establish a company to help a cause of your choosing?! If you privately fund everything yourself, probably less headache!

[@salahuddinmuhammad3251]

I run a Japanese dojo and cultural organization since 1984. Since the pandemic, we have decided to try to do something in both the nonprofit and for-profit sections. Instructional materials, give seminars, teach cultural aspects, self-improvement programs. I just got over cancer and I am at a loss with my filing status. I was always a sole proprietor but I want that to change. I now have an international audience, so this video caught my attention. Thank you so much. I have a lot of research to do

[@Ashlee_Tate]

This sounds amazing! Come join us in the tribe to ask any questions along the way! I’d love to hear more and congratulations on winning your battle with cancer.

[@DonovanPoole]

Ive listened to this video 3 times. This is EXACTLY what Im trying to do, and do. A "virtual call center" calling public lists, giving away beneficial financial information, and if they want the service, charging the fee to perform.

[@Ashlee_Tate]

Honestly, it sounds like you have a for profit business giving a free service. Am I missing the charitable side? By the way Donovan, are you in the tribe?

[@aliciamack9323]

I like this on non profit . This is something on volunteer work i have been getting into

[@NikkiBee-xc6hg]

Hi Ashlee, omg thank you for this video. Ive been searching for ways to setup my museum as a non profit but also a for profit sector that sells food, memorabilia and more related to the museum in order to keep the museum sustained; you were the only one with a video that breaks down how the process works. So grateful. Im now searching for a lawyer for assistance in getting it set up.

[@Ashlee_Tate]

Yeah! I’m so proud of you! Wishing you the best of luck! Come join us in the tribe to share your journey!

[@kai85kai]

Having a restaurant within the nonprofit is allowed for the nonprofit. It would not be Ubit if it is unrelated. Multiple museums do this and it is allowed because it allows patrons to not interrupt their visit. I'll link information.

[@NikkiBee-xc6hg]

@@Ashlee_Tate sorry for replying so late im jsut seeing this. Ill definitely join and share my journey.🤩

[@NikkiBee-xc6hg]

@@kai85kai Thank you for that detail as i can use all the information i can get. Please share the link so i can review when you have a chance. Thanks again

[@lilycrmowarrior2715]

Yes, Benefit Corporations!!!

[@michelleatmassagestudentpr6298]

Ashley, I've been following you for a year and NEEDED this video TODAY. Wow, speak of divine timing. Thank you!

[@Ashlee_Tate]

I'm so glad it helped! What did you end up doing? I'd love to hear an update! Are you in the tribe?

[@tnicolec90]

Thank you soooo much for this information. I'm literally trying to figure out how to have both right now and this was sooo helpful, thank you.

[@tnicolec90]

I want to start a nonprofit helping pet owners pay for a specific medical services for their pet that is needed to save their life. To get money for the nonprofit i have decided to open a pet store selling handmade dog goods. I initially was going to keep the businesses seperate but i was just told today that i can keep them together. They recommended i do it the c corporation way that you described. However i already have my llc paperwork done and now have the option to reclassify it as a c corporation so i can do them together. What do you think would be best? The only main reason I've been given as to why i should do them together under the nonprofit is to save the 800 dollars yearly fee for the llc.

[@Ashlee_Tate]

I always recommend keeping them separate so that the funds can be tracked and/or donated. You can also partner with a nonprofit that helps pay for medical services, run your business and donate some of the profits. Or you can start a nonprofit that raises money by selling your wares.

[@hettiewilson9407]

THIS IS SO RELEVANT TO WHAT I'M DOING RIGHT NOW!!! THANK YOU!

[@Ashlee_Tate]

So glad to hear! How is it coming along?

[@hettiewilson9407]

@@Ashlee_Tate Thanks for responding. I'm kind of in a holding period. Not sure what my next step is right now. Just praying for direction.

[@toddsharp4400]

Great info thank you

[@Ashlee_Tate]

Thank you so much for watching

[@MrJbourdier]

Super Helpful, the 1st options is what I though, thank you so much,

[@Ashlee_Tate]

Glad it was helpful! Thank you so much for watching!

[@praveenvarma1369]

Ashley, thanks for such good ideas!

[@Ashlee_Tate]

So glad they helped!

[@hyojinlee]

Thank you for this video!

[@CaliforniaRussianRiverBees]

Great show 🤔 looking to have Profit for Non-Profit 2023. We had to change the model.

[@Ashlee_Tate]

Thanks so much! I’d love to hear more about your model change

[@CaliforniaRussianRiverBees]

@@Ashlee_TateHi Ashlee Profit Model for Grocery Business. Then possible Non-Profit.

[@coachchrisekwueme]

great video!!

[@marcelinojr.deperalta3735]

I had the same question too. Much Value in this video.

[@Ashlee_Tate]

appreciate that! What did you decide to do in the end? Are you in the tribe by the way?

[@marcelinojr.deperalta3735]

​@@Ashlee_Tate I have just registered a for profit. I think For-Profits can deliver more value to the world when managed correctly at the same time you the owner is payed from your strategy and hardwork. This was the best option for me. I know others may choose the NonProfit, all of us has their own objectives. For the tribe, I am not in it, I don't know what it is about.😊

[@Ashlee_Tate]

👏👏👏 so proud of you for starting! Social impact can be for profit too! I love that you have the goal of giving value! That’s the key!!!

[@stoneysoraclechannel7839]

Hey Ashley thanks for this info. Could you do a video on Ubit?

[@Ashlee_Tate]

Yes I can! Thank you for asking! Make sure you are part of the tribe because sometimes I do additional content like this for Ask Ashlee Anything on Mondays!

[@carolynmurphy9521]

Yes! Question. Can I form a nonprofit under a for-profit?

[@Ashlee_Tate]

You can form a nonprofit alongside your for profit but the most important piece is to keep them separate as if you were running 2 separate businesses

[@martinpetrucci2032]

Great video! Thank you

[@Ashlee_Tate]

So glad you liked it! Thank you for watching! Are you planning to start a for profit or nonprofit?

[@gt4real377]

We need to raise money to pay for things so the 1st 5 years we are not helping anyone in those years .

[@Ashlee_Tate]

I would strongly recommend helping people during those years even if it isn’t as many as you’d like but people need to see you executing your mission if you want them to donate.

[@firebrandsgirl]

I feel asleep and this must have continued to play. Because when l work up the conference room o separate the for profit and non profit came to me in full. I mean l can see them so clearly now. It is as if a bright light is shining through my window. I can't turn away. Hahahah Thank u.

[@Ashlee_Tate]

Awe I love it! I’d love to have you come join the tribe some we can watch you grow! Go to Ashleetate.com/jointhetribe

[@daviddunkerson7507]

Thank you this is very helpful. Could you talk about self dealing. Like a nonprofit that owns a LLC?

[@Ashlee_Tate]

I will definitely add it to the list! Thank you so much for the feedback!

[@docrocdd]

Hello there nice video , I'm about to start a for profit and a non profit at 59 years old. would like more info

[@Ashlee_Tate]

Is love to help you! Grab your free invite to the tribe by going to Ashleetate.com/jointhetribe

[@8924-r7b]

Thank you for sharing your knoledge! Question, can a sibling or a relative be a board member?

[@Ashlee_Tate]

They can as long as you don’t go over 49% your board related to you or family members.

[@8924-r7b]

@@Ashlee_Tate thanks for the reply 👍

[@wordwriter]

Thank you for this video! Do you think that merchandise like t-shirts, etc. would be related enough to sell under a non-profit? For example, if the cause is mental health, and the nonprofit sells merchandise with the nonprofits name/logo, and mental health awareness messaging on it?

[@Ashlee_Tate]

Yes! I’m referring to someone helping children but owning a motorcycle shop. Something completely unrelated to their purpose. Great question

[@wordwriter]

@@Ashlee_Tate Okay, thank you! :)

[@seedfromatree]

I think you accept donations, and offer a free T-shirt for certain levels of donations/ that way you’re not “selling” anything, only gifting for promotion and accepting donations

[@mariaf1964]

This is such helpful information, I appreciate it! Glad I stumbled upon your page :D Question - can B corps still accept donations or apply for grants?

[@Ashlee_Tate]

They cannot ask for donations unfortunately. That is reserved for nonprofits

[@carnellamarks5755]

How do you use your for profit to cover event for your nonprofit until your non profit has funds to pay for insurance.

[@Ashlee_Tate]

Hi Carnella, can you explain what you mean by 'cover event'?

[@FrancoVision]

What about if you already have a for-profit agency but want to create a non-profit to qualify for Public Service Loan Forgiveness (PSLF)? I am a licensed clinical social worker in private practice but don't qualify for PSLF because I have to be a non-profit. I am a single-member LLC. This rule needs to be revised, but unfortunately, getting change will take an act of Congress. Please advise.

[@Ashlee_Tate]

Thank your for the question. I don’t have enough experience with the PSLF but wouldn’t advise starting a nonprofit to qualify for anything. They require a lot of work and focus (board management and so). You can, however, start up a nonprofit while also having a for profit they just need to be kept completely separate.

[@jodahamunra686]

I needed this information, thank you! Gave me some things to think about... #Hotep

[@Ashlee_Tate]

I am so glad to hear this!!!! Come join us in the tribe if you haven’t already! Grab your invitation at Ashleetate.com on the right hand side! We’d love to come along on this journey with you!

[@GrowingPains917]

At 8:41 you said that you can advertise them together. I can see how the for-profit can advertise the nonprofit, but I don’t see how the nonprofit can advertise the for-profit without risking getting in trouble with the IRS. I really don’t know much about the subject, but it seems like there could be a problem with the non-profit benefitting an individual. Maybe a little bit of that is okay?

[@GrowingPains917]

Here are some terms that might be relevant, but I don’t understand them. boardsource.org/resources/private-benefit-private-inurement-self-dealing/

[@Ashlee_Tate]

James this would only be an issue if it was unrelated business income and you were spending majority of your efforts there then yes the IRS would frown upon that. What I’m referring to is more of the structure of your nonprofit rather than combining two separate businesses. Most nonprofits have some form of for profit wrapped into their business...think selling t-shirts or an event. These are profit building activities that support the nonprofit bottom line

[@GrowingPains917]

@@Ashlee_Tate thanks for the response! That makes sense. I still have a lot to learn, so thank you for your time! Great videos by the way!

[@Ashlee_Tate]

Appreciate that!! If you’re getting started we’d love to have you join us in the tribe! You can get your invitation at Ashleetate.com

[@nadaudjacques-louis7426]

This was awesome Ashley. Reading both of your comments answered one of my questions 😇… I created an LLC shirt business, since the nonprofit needs to be corporation, is it ok to leave the shirt business as LLC, if I plan do the unrelated business income tax?

[@childofsheba3244]

Nonprofit yes, corporations and LLC s no paying an agent of "public office" is very unnecessary when you can just read yourself and learn as you go attorneys, by their jurisdiction, works ONLY for the court and state not the client remember the land is occupied unlawfully one must learn law on our own to get successful results rather lose money in private and public jurisdictions

[@timewtell9239]

I want a for profit so that o can raise money to help kids and teens whom cannot afford their needs for school

[@Ashlee_Tate]

So necessary! There are so many kids that could use this!

[@rachelabbruzzi3751]

If a person wanted to open a c-corporation and want most of their funds to go to a non-profit they are part of, would they still be allowed to work at the non-profit? For example, could the executive director at the non-profit also be the owner of the c-corporation? Let's say they want to open a coffee shop unrelated to the non-profit mission, yet they want to continue to be the executive director at the non-profit. Could they do both? I know board members can't overlap, but can employees/volunteers of the non-profit overlap with the business. I hope this makes sense.

[@Ashlee_Tate]

Yes, you can do this however the funding and the like you said the board must remain separate. That way you would be working for a for profit while running the nonprofit and donating funds from your for profit business. On some matters you would need recuse yourself from the vote such as salary or a partnership with your company. Rachel, are have you joined the tribe yet?

[@rachelabbruzzi5077]

@@Ashlee_Tate thank you so much! This information was beneficial. And I do not think so. How do I join?

[@Ashlee_Tate]

@@rachelabbruzzi5077 Got it! Just go to www.ashleetate.com/jointhetribe and grab your invitation!

[@expulsion50]

Interesting, The water in the backgound is very distracting

[@Ashlee_Tate]

Apologies for the water! Hope the info helped! Let me know if I can answer any questions for you!

[@lilycrmowarrior2715]

Can you please share the link with me you referenced in this video about nonprofits using the Benefit Corporation as their for-profit subsidiary? Thank you

[@Ashlee_Tate]

jeremychenlaw.com/for-profit-subsidiary-of-a-nonprofit/ This gives you a run down of how this works. Generally, a Benefit Corporation involves the for profit income and the impact so you wouldn’t use it specifically as a for profit subsidiary. You would just start a Benefit Corporation to accomplish both

[@trueroseincubatorinc.6638]

Can the services that people pay to the separate for-profit be considered tax deductible to the buyer?

[@Ashlee_Tate]

No, not a separate for-profit business. Those funds can be donated from the for-profit to the nonprofit but the customers would not receive a tax deduction.

[@pattipenningtonministries7601]

Question i have a nonprofit an i would like to open a llc salon suites which my nonprofit also helps women an Men for self improvement on them self's. Should I put my salon. Suites under my nonprofit

[@Ashlee_Tate]

You absolutely could if it is what your nonprofit’s mission is mostly focused on. I would look up UBIT to be sure or speak to a lawyer and confirm the legal aspect of it all.

[@trueroseincubatorinc.6638]

Can the services that people pay to the for-profit be considered tax deductible to the buyer?

[@Ashlee_Tate]

If you have this as a part of your nonprofit, there’s a possibility.

[@thegunhub876]

Which is better non or for profit?

[@Ashlee_Tate]

Honestly it really depends on your goals for the organization. If you have a charitable aspect then o would say a nonprofit. If you have a desire to make a profit without the supervision of a board I would suggest a for-profit

[@JustinWilt-w8f]

can a business make money off of a nonprofit charity or is that illegal ? the reason i ask is i want rise money to help buy a ESA (emotional support animal) to help get my pets back but my boss wouldnt let me saying the business would want money out of it

[@Ashlee_Tate]

Yes this would likely be illegal. Only the nonprofit can make funds from fundraisers if I’m understanding your question correctly!

[@rootednchangewisdom-streng6846]

I definitely need help with starting my business please help

[@Ashlee_Tate]

I'd love to help! Have you joined the tribe?

[@jasmineweiss1097]

Can i ask my customers if they want to donate to my non profit?

[@Ashlee_Tate]

Absolutely!

[@RoxanneJones-vx1sm]

Hi thanks for this video I'd like to talk in person with u please ! Its important so important

[@Ashlee_Tate]

Hi absolutely! Go to my website Ashleetate.com/workwithme

[@dwainking3086]

😍😍😍

[@miamiles7996]

Can I create a for profit to assist battered women instead of applying for 501c3 status?

[@Ashlee_Tate]

Absolutely but people will not be able to donate their support. What exactly are you looking to do?

[@miamiles7996]

The Socialife Diaries Purchase single family homes for domestic violence victims.

[@Ashlee_Tate]

@@miamiles7996 will they need to pay for the housing or will the housing be charitable? You can absolutely do this if you have the means to purchase the homes and accomplish your mission but if it is more of a charitable mission I would suggest a 501c3 for tax exemptions and the possibility of donations.

[@miamiles7996]

@@Ashlee_Tate Oh ok thanks

[@Ashlee_Tate]

@@miamiles7996 great question!!

[@Badia.Online]

For someone that wants to sell product within a non profit, can you set a price for those products? Or is it solely donations.

[@Ashlee_Tate]

Products can be priced. Like t-shirts or swag. Event tickets and so on

[@Badia.Online]

Thank you

[@dablackking7551]

Peace

[@TeamLevi666]

The back noise is annoying. It takes away your great message.

[@Ashlee_Tate]

I’m so sorry! I’ll try to re-record. Thanks for letting me know!

[@geniusmindmeditation6776]

Hi Ashley, thank you very much for the information. I was referred to you by someone we mutually know. How can I create a non-profit business for my freelance copywriting and meditation music youtube channel? My target audience is individuals who have autism and other forms of disabilities. My copywriting business will center around this by creating content for companies that advocate and support mental health and wellness for the community.

[@Ashlee_Tate]

Not sure how I missed this comment but are you wanting your copywriting business to be completely charitable? If not, I would suggest providing those services for a low cost or for free but create your business as a for profit and donate that time. We only want to be a nonprofit when your overall mission is completely charitable. Have you joined the tribe yet?

[@dwonking5696]

😅😅😅