You can’t really “own” a nonprofit business. When applying for a 501c3 (nonprofit status) there are number of requirements that reassure the government that individuals will not profit. Ultimately, control is turned over to an elected governing board of directors or trustees who serve term limits. The board is legally responsible to follow the nonprofit`s charter/bylaws/mission as well as review and approve the annual budget, organizational chart, strategic plans, and important new initiatives, hire a director, etc.
Conversely, a nonprofit can own and operate “for profit” businesses (e.g., restaurants, gift shops, casinos, etc). However, these businesses must paid taxes and the proceeds (after expenses) must support the nonprofit organization.
I’m curious…why would you want to consider such a business structure?
I think I understand but again, there’s a big price to pay when a nonprofit is created – you lose control of any assets that become part of the nonprofit organization.
Look at it this way; for-profits and nonprofits aim for very different outcomes. While the goal of a for-profit business goal is to make money, the goal of a nonprofit is serve a cause. To earn nonprofit status, and thus avoid paying taxes, a governing board of directors must be put charge. The board controls all the discussion-making within the nonprofit. They are obligated to act in the best interest of the nonprofits mission, which may be in conflict with the for-profit business.
Any donated funds and tax benefits must support the nonprofits mission. They cannot be shared. Essentially, the business and the organization would have to keep separate financial records. They may be a way around this but I don’t see how.
Have you considered creating a foundation? Many companies and individuals establish foundations so they can donate to specific causes they care about. They gain tax benefits while controlling what their donated funds support. For example: A foundation might grant funding to the arts, or the homeless, etc.
Whatever decision you make, be sure to contact your State’s (not the feds) Secretary of State well in advance. Talk to someone in that office about you idea and ask for guidance. Their website should also list conditions for nonprofit status. finally, I strongly recommend an attorney review Articles of Incorporation and other documents required to file an application for nonprofit status.