New Year - The Year!

At the Liahona Mission, we want this year to be THE year!  The year where it all comes together, where we become "real"!  We've strove for this day since the first condemned house was purchased!  Nine years now!

But wait, what do we mean by "real"?  Aren't we "real" already?

Well sure we are!  Duly incorporated in the State of Illinois, registered with the Charitable Trust Bureau, a FEIN from the IRS and all Annual Reports annually reported!

And moreso, we're not just a paper foundation, but own - free and clear - two properties with a functioning home on each!  And have been aiding people at a goodly rate, so that over 40 guests have received assistance with us since we opened our doors back in 2014!

But there's more we wish to do.  Before feeling that we're "real".

There are further improvements, some quite needful.  While the basement of the second house is electrified, has plumbing done and half of it walled, there is yet more to do.  The rest of the walls need put in, the electrical in general needs reviewed and a few more outlets added.  A ceiling needs to be put in.  Floor painted.

Elsewhere in the second house, there are four windows that need to be replaced.  That will cost $150 or so a piece.  Never minding installation.  Gutters are still needed!  They are bought and available to be installed on the second house, waiting for spring, and there are more gutters needed to be purchased for the first house.

There's also some general landscaping, possibly a fence, perhaps even a sign.  Definitely a new paint job. Those things will make it all seem more "real".  Paying off the last $510 in repair debt we have will make us feel more "real", too, as being in debt is lousy.

But most of all?

Our 501(c)3.  Ahh, yes, the thing that everyone assumes that all non-profits have automatically.  No, that's not automatic.  You have to pay a fee and fill out 20 to 30 pages of an application.  And it's best to have the aid of an accountant while doing that.

Ok, you don't really need to read
this, but there is a lot to it!

The fee at first is $400.  But after a few years, it goes up to $900.  For reasons of spending everything in repairs and renovations, we are here at the $900 stage now.  And it may well be a few hundred dollars to hire a CPA to help us.  Maybe $500.  Some time this year, one way or another, we'll be asking around to get prices on that.

Why does that make us real?  Is this where we get to avoid taxes?

*sighs*

I can't count the number of people who when hearing that we have a non-profit foundation immediately assume "tax dodge" as in "oh, so you don't ever have to pay taxes again"!

It doesn't quite work like that. If by "not quite" I mean "not at all".  If you're a large corporation, it gets you out of Federal income tax.  And in some cases other taxes, not always.

And you see, we're a small foundation.  So with annual revenues well under the $25,000 reporting floor required by the IRS, we don't actually owe corporate taxes anyway.  We can't then avoid Federal taxes that we never have to pay.  We do, however, owe property taxes each year, and even after securing a 501(c)3 tax exempt status this does NOT automatically waive those.

Rather when we get that status, we will have to apply with the local taxing authorities where they may or may not choose to give us an exemption.  They do not have to, and what's more, often do not.  A compelling reason, greater than "I'd rather not pay property taxes" must be provided and backed up and defended.

Why do we wish tax exempt status if it is unlikely to aid us in taxes we already do not pay and taxes we probably will still pay?

Well, it makes us "real" in the sense that we are then on an equals footing with other charities.  See, in the great scheme of things, even such things as "donations" are susceptible to market forces.  People when donating are - like with any other "purchase" - seeking the most bang for the charitable buck.

Other charities, when you donate to them, you get to declare that on your taxes.  You may "take a deduction".  With us, sad to say, you cannot.  Giving to our charity is a pure act of charity, as you will derive no tax deduction benefit from it at all.  Thus if you have $50 or $500 to give, and two equally worthy charities, one where you'd get a deduction, and the other - us - where you'll get a hearty "thank you!", which will most choose?

It's not like Big Charity doesn't know this
and hammer this point home.

We'd like to then be a 501(c)3 tax exempt corporation to change that.  Though we will keep giving out hearty "thank yous", too!

Also, there is a perception issue.  Many, hearing we are not "tax exempt", incorrectly assume that we are not "real".  Because "real" charities get them a tax deduction.  Real charities - so they falsely believe - are exempt.

Is that the only reason we seek this?  No.  There are two other notable reasons.

For one, we would be eligible to be sales tax exempt on purchases that were for the Liahona Mission.  And given some of the quantities of materials we buy for repairs and renovations, that's not nothing!  True, by the time we get that, most of the repairs will already be complete, but as any homeowner knows, there are ALWAYS more materials and such to buy to keep a home maintained.  Let alone two homes.

For two, we would be eligible for some programs at the Central Illinois Food Bank.  Having six guests about, not all who have LINK, not all who are prudent with the LINK they have, can make it hard sometimes.  We cannot feed out of our pocket everyone who is hungry, but when some guest asks to speak with you, and shares that they've not been able to get down to the Breadline today and are really hungry, what can you do?  Say no?

Well, we can't.  So we give what we have for ourselves and hope that it all comes out in the wash.  So far, it always has.  Thanks to Heavenly Father and Momofuku Ando*.  But a bit of breathing room by being able to place orders and make wholesale purchases at the food bank would be of great aid.

And that takes a 501(c)3 tax exempt status.

You can see then all the benefits, some for sure, others speculative.  More donations likely, surer supply of food for the guests, sales tax relief on purchases for the charity, all those are for sure.  Possibly property tax relief one day, and in the event that we ever grew enough to have even more houses and revenues in excess of 25k, tax relief on that.

It's well worth it, then, and what we wish to strive for this year.  So as to be "real"!

*In 1958 this unsung hero introduced Ramen instant noodles to the world.