Food Not Bombs & the Non-Profit Tax ID

Most of the time, merchants will donate the stuff they'd otherwise throw away to you with no strings attached. While ideally it would work otherwise, businesses will often donate food, supplies, etc. so that they can get a tax deduction. This means they won't donate anything to the group if you don't have federal 501 (c)3 non-profit status. This presents a problem, as most groups are not incorporated as anything more than a loose-knit, open collective.

Starting a non-profit isn't necessarily a difficult task. You just have to write an application for the IRS. You will need to keep better track of things like monetary donations, any valuable donations received and accounting in general. Most non-profits have a board of directors, bylaws, and other legal requirements, though one could be incorporated with no hierarchy and good accountability in place.

The question is why go through all the hassle?

First, if you don't actually need that donation, don't worry about dropping it. Then again, if it's a great donation and you really need it, do your best to find a tax id.

Instead of incorporating and having the government sanction your existence, a good way to get a tax id is to use that of an already-existing non-profit that is willing to have donations go through its financial structure. The donations would go directly to you, but the umbrella organization would just accept the paperwork (probably not much). If the IRS asks that your umbrella non-profit open its books, your donations will be scrutinized, so don't think that by doing this FNB is staying off the grid.

Still, Food Not Bombs chapters have done food pickups for years where the donor is writing off the food she donates, and had no troubles at all. Overall, just keep the issue in mind.

<<< [toc] >>>