Nonprofit organizations can benefit financially from the business activities of their supporting members.

Nonprofit 501(c)3 companies are permitted to own for-profit companies. These companies can offer services to the supporters of their organizations.

Most simply, a subsidiary of a nonprofit organization can affiliate with service providers such as insurance, real estate, stock brokerage and travel. The nonprofit owned subsidiary would be a client introducer, with the introduced agency doing all the work. Similar relationships could include a broad range of other services. The supporting members of the nonprofit would know that there was a benefit to the nonprofit through a fee sharing arrangement.

Also, in some cases the nonprofit may be able to negotiate discounts, commissions or even both, in return for providing access to organization members which result in transactions.

It is also possible that some or all the nonprofit members might be invited to form panels in which their answers to questions and/or disclosure of their cell phone presence and activities might generate fees. The fees could be paid to the nonprofit or to a supportive company.

It is important to be sure that neither personnel nor management of the nonprofit are actively involved in the operation of the subsidiary entity which benefits the nonprofit. Also, it is not necessary that the nonprofit own the entity benefitting from the patronage of the nonprofit. It can be owned by anyone who chooses to be supportive of the nonprofit.

The above thoughts recognize that the ability to reach the organization’s supporting members has an ongoing value, while also benefitting the members.

 

Arthur Lipper, Chairman
British Far East Holdings Ltd.
+1 858 793 7100 (US Pacific)
arthurlipper@gmail.com

 

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