The IRS has just issued its letter approving our request for 501c3 tax exemption, which now makes it possible for us to accept (and issue receipts for) tax-deductible donations, apply for foundation grants, and conduct other fundraising activities. CRCS, the parent organization for the nonprofit New Jersey PACE program, is now ready to undertake its first administrative and educational initiatives on behalf of municipalities in New Jersey. (For more details on NJPACE, please visit www.NewJerseyPACE.org.)
Many organizations may take this approval for granted, but since we worked pretty hard to get it we do not. The process of obtaining the IRS approval included an intensive discussion of our goals and methods of operation. Here’s part of what we told them, by way of a description of our mission and purposes.
To begin with, we shared our goals as stated in our Articles of Incorporation:
- Providing local communities with educational services on the effects of climate change and other related issues that can affect their long term ability to regenerate their ecological and economic systems,
- Providing local government institutions with assistance to undertake actions and initiatives to reduce and ameliorate present and expected extreme weather and other climate change effects,
- Providing small businesses and non-profit organizations with expertise and funding by partnering in projects to undertake actions and initiatives to reduce and ameliorate present and expected climate change effects in low and moderate-income communities, including communities impacted by Hurricane Sandy.
Part of what we also indicated in our notes was:
Part VIII, Sec. 6a and b — Economic Development Activities
The CRCS engages in activities that are intended to foster economic development in several forms: local economic development, community education and engagement activities, sustainability planning, and local clean energy financing. All of these purposes are intended to serve the needs of communities, organizations, and individuals in a manner that has been determined by custom and prior rulings as promoting exempt purposes.
In response to a question about the possibility of joint ventures, we indicated:
We may enter into partnerships or joint ventures in anticipation of the possibility that these will “serve the needs of communities, organizations, and individuals in a manner that has been determined by custom and prior rulings as promoting exempt purposes.” We do not at present have any such joint ventures, and do not intend to enter into any joint ventures with businesses related to board members.
For example, in May 2013 we coordinated the submission of a proposal to redevelop a state-owned property of historic significance, the former Greystone Psychiatric Hospital, on behalf of several for-profit and nonprofit entities as members of a proposed regenerative community design team.
(We are still awaiting a response to this proposal.)
The partners we listed are unrelated entities, chosen for their specific skills and experiences in designing and developing such properties in an ecologically-restorative manner, who have contemplated working together on the proposed project should it materialize. In such an eventuality, CRCS would act as a nonprofit team coordinator in order to best serve the needs of the community. The relationships between the parties would depend on their specific roles as noted above.
There is no other contemplated instance of a partnership or joint venture with any other entity. No such agreement has been negotiated or signed in this instance, nor has there been any discussion of doing so at any board meetings.
Ordinary business relationships will be established in the course of CRCS’s everyday activities in furtherance of its stated mission “in a manner that has been determined by custom and prior rulings as promoting exempt purposes.” Such relationships may include sponsorships, ongoing business arrangements, procurement of goods or services, etc. It is unlikely that any of these would be constituted as “joint ventures” except in the type of instance exemplified by the Greystone proposal.
We thought it might be useful to post this, both to lay out some of our goals, and also because few of us have any experience with actually getting a 501c3 designation approved. A majority of applications are prepared by attorneys, who have learned many of the arcane and unwritten rules that can trigger questions or rejections; but in some cases the language they use can cause more problems than it solves. In a previous submission, it took so long for us to get the attorney’s approval that — after months and hundreds of dollars in extra costs — we simply abandoned the effort. So this time we chose to go after it on our own, and apparently have done so in record time (about nine months); and we’re now much better informed and much clearer about our own goals and commitments.
Here’s a copy of the approval letter itself: