The Chestnut Hill Community Association’s Board of Directors recently moved to pursue 501(c)(3) status for the organization. It currently is a nonprofit but lacks 501(c)(3) status and thus cannot accept tax-deductible donations.

Jean C. Hemphill, Practice Leader of Ballard Spahr's Health Care Group and President of the Chestnut Hill Community Fund, made a presentation in support of the new tax status. As a professional in nonprofit law, she outlined the CHCA's options, including what to do with the Chestnut Hill Local, which is owned by the association. She recommended spinning the newspaper into an LLC, stating: “Why do a lot of lawyers like LLCs? They’re simpler than corporations and more flexible. You can delegate it in a much more easy way than a typical corporation …. You can still have certain powers reserved, and any revenue the Local has would go to the CHCA so its revenue would not be taxable.”

Ms. Hemphill also described ways in which the Association could continue to own the Local as an LLC, all of which have "catches" relating to taxes. “If the IRS believes [the Local] is unrelated income then it's taxable,” she said. “We would have to analyze whether the Local is part of the CHCA mission. I believe it is.”

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Business and Finance
Exempt Organizations
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