Feeder Organization

Feeder Organization
Starting a nonprofit

Nonprofit Jargon Buster – What is a Feeder Organization?

The idea behind Code Section 502’s prohibition on exemption for Feeder Organizations is that one cannot convert a for-profit business into a charity simply by contributing all of the profits to charitable organizations. The policy rationale is that permitting businesses to operate on a tax-free basis just because they donate their proceeds to charity permits unfair competition in the marketplace.

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How to Start a Non-Profit Organization

Download our free guide to learn about the many elements needed to run a successful nonprofit organization, as well as how to avoid common pitfalls and mistakes.