Community Theater Green Room Discussion Board: sponsorships from businesses

Message

Does anybody know the anser to this?  

We are incorporated as a not-for-profit community theatre group, but we have not applied for 501c3 status yet.  

If businesses give us money (as in perhaps sponsoring a show) can they deduct it from their taxes if we are not a 501c3?  Perhaps, a business expense deduction as an advertising expense?  

Which would be better for the business tax-wise, a charitable donation (if we became 501c3, and which I think they could only claim part of) or a straight business expense deduction for advertising which they could deduct the whole thing as an expense?

I hope this makes sense.

Thanks,

Sue

Author	Message
oops Walk-On Joined: 12/24/07 Location: United States Online Status: Offline Posts: 0	Topic: sponsorships from businesses Posted: 12/24/07 at 8:39pm
	Does anybody know the anser to this? We are incorporated as a not-for-profit community theatre group, but we have not applied for 501c3 status yet. If businesses give us money (as in perhaps sponsoring a show) can they deduct it from their taxes if we are not a 501c3? Perhaps, a business expense deduction as an advertising expense? Which would be better for the business tax-wise, a charitable donation (if we became 501c3, and which I think they could only claim part of) or a straight business expense deduction for advertising which they could deduct the whole thing as an expense? I hope this makes sense. Thanks, Sue

	IP Logged

75director Celebrity Joined: 8/19/05 Location: United States Online Status: Offline Posts: 122	Posted: 12/26/07 at 11:56am
	While I'm no expert on tax issues, I believe in order for the business to deduct the expense from their taxes you would need to be a 501(c)(3), or have another tax exempt organization, like a community foundation, accept the money on your behalf, and then give you the money. There are several community projects in my area that do that. But my biggest piece of advise is to bite the bullet and jump through the hoops to get your own 501(c)(3) designation. Most businesses and grant making entities won't give you money unless you are a 501(c)(3). It is well worth the time and hassle. Maybe find an attorney in town who will do the work for you for free.
	IP Logged

sonshine Lead Joined: 3/23/08 Location: United States Online Status: Offline Posts: 33	Posted: 8/27/08 at 4:01pm
	It is true that they can only claim the amount if you are a 501c3 BUT the IRS is coming down hard on this. What do we non 501c3s do until we get our status?
	IP Logged

Money Talk
Community Theater Green Room Discussion Board :Theater Administration :Money Talk

Topic: sponsorships from businesses( Topic Closed)