Hello maggie6 -
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Thank you for your understanding.
My father happens to own two 501(c)3's and has consulted with a lawyer
on very similar issues.
I talked to other various sources to research your question, one of
whom was Mr. Richard Neal, the president of Fundraising Fundamentals
(visit www.fundraisinghelp.com), an organization that specializes in
fundraising for nonprofits. I encourage you to contact Mr. Neal at
901.624.0062 to freely discuss some of your specific needs and issues.
He has a database of applicable sources that you may opt to pursue
for funding, as well as other relevant consulting capabilities that
may help you in your endeavor.
To address your question:
There are a couple advantages to having your own separate 501(c)3.
A first major advantage would be the significant increase in
visibility to available fund sources. There are simply more available
sources for funds if the school were to be unaffiliated with the
church. There's also more flexibility in how you can present
yourself. If you remain affiliated with the church, you must request
funds in the name of the church, thus limiting your funding options to
foundations willing to give grants in these circumstances.
Mr. Neal tells me that one of the largest religious charities in the
United States has their own separate non-religious 501(c)3 for
purposes of obtaining funding from government-oriented sources that
were traditionally barred from contributing to religious entities (the
landscape of which has changed vis-a-vis Bush's moves to expand the
purview of governmental funding). So you can see that the creation of
separate corporate entities for specific purposes occurs at the
largest of levels.
The second advantage is independence of visibility and clarity of
establishment. Because of concern with today's questionable ethics,
seeking funds as your own entity may be less "intimidating" to a
possible grantor when the funds are going from point A to B, rather
than from point A to point B to point C. If a foundation were to
donate funds to the church, they may be concerned with the possibility
of the funds getting "lost" (a kind term) in the general funds, since
they'd be ceding the money to a "middleman" of sorts (especially if
the check is made out to the church). Setting up your own 501(c)3
should help mitigate any apprehension on the part of a foundation in
this regard and serves to show the school's independence as a bona
fide corporate entity in its own right.
To answer your other question regarding why some foundations don't
give to churches, a prominent reason is: they do not want to be deemed
official supporters of a particular denomination. They want to avoid
the "politics of exclusivity." It is each organization's preference,
however, in this matter.
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Nonprofit Assistors LLC (www.nonprofitassistorsllc.com)
Director of Jezreel International (www.jezreelinternational.com)
Iowa Attorney General