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The Forum > General Discussion > At what point is a not for profit organization, a business.

At what point is a not for profit organization, a business.

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Churches are not registered Charities. Charities run by a board of directors under a Churches name are there to assist the poor or disabled. Lions, Rotary are Charities similar to Church established Charities.
The question should be asked, gifts to the poor should they be taxed? Charities like Lions and Rotary often raise tax free money for community projects should they pay tax?

The whole proposal to tax Charities reeks of a spirit of meanness and not community. There is an underlying antagonism toward Church charities. All Charities are answerable to the Government to retain their Charity status. Ask are they improving condition in the community, or merely serving themselves?
Posted by Josephus, Sunday, 25 January 2015 6:38:54 AM
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Joseph, another diversion.

What happens in the church is not the issue, the issue is when they use tax free money to acquire income producing assets.

Are they still a church/charity, or are they a business?
Posted by rehctub, Sunday, 25 January 2015 11:16:25 AM
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rehctub, Church buildings have never been considered a Charity, or a business, they are the project of members of a group who pool their already taxed income to house themselves for meetings and services. There are no fees for entry. There is no legal financial transaction between members and the body of members. Members make voluntary donation toward the upkeep of the buildings and resources. However within membership there are groups that raise money for charity, and these Charity groups are answerable to Government to retain their charitable Status.

Unless you can give examples of competing businesses run by Churches competing with open market then you are wasting your time and mine.
Posted by Josephus, Sunday, 25 January 2015 7:11:49 PM
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Joeseph, check the ad on page 7 of the thread, above your last post, it says, make a tax deductible donation to a charity before June 30. How ironic.

Now, it's what that charity does with those tax deductible donations that in my opinion determines whether they are acting as a charity or a business.

It truly is that simple.
Posted by rehctub, Monday, 26 January 2015 8:28:17 AM
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rehctub,
Identify what businesses are receiving tax free dollars?
Posted by Josephus, Monday, 26 January 2015 3:15:39 PM
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Il give you a common scenario Joeseph, and il use a church as an example, simply because it's comon practice.

A church often starts out as land gained through a government grant. The member then work very hard with fund raising to be able to build their church.

They then collect donations, and hold fund raising events along the way, all of which is considered tax free income, and rightly so.

So then the church finds its self in a position to secure additional land to build a venue that is commonly used as a school camp, or for social groups, as these types of venues commonly have a hall, a kitchen and dorms.

It's is this type of activity, whereby the funding used to purchase the venue was tax exempt because they were a charity.

So, when they purchased this asset, they did so on the open market, which meant other tax paying entities may have been competing for the same asset.

Then there is the situation whereby a wealthy church member, (while stil alive) gifts the asset to the church, and the church then proceeds to utilize this asset as an income producing asset.

So the income from this asset is also tax free and over time this tax free income can be used to secure yet more tax free income producing assets, albeit over a period of many years.

So this is why I ask, is this stil a charity, or is it now a business.

If it's stil a charity, then there is a definite competitive advantage over a tax paying entity running a similar business.

So as I say, I don't have a problem with a church generating tax free income within the church, my problem is how they use thiese tax free dollars and why they are given a commercial advantage.

Can you justify a charity having this advantage, if so, how?
Posted by rehctub, Tuesday, 27 January 2015 6:58:43 AM
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