For example, in Rev. Ruling 2004-51, the IRS authorized a 50/50 control relationship between a Section 501(c)(3) educational institution and a for-profit company that jointly operated distance learning centers. The educational institution retained sole control of the educational functions of the Joint Undertaking (i.e. the curriculum, training materials and teaching). The company had control over the location of the centers, which was not a critical component for the liberated purpose. A similar analysis could be used for an economic development project in which a non-profit organization would choose the site on the basis of public utility needs and the companies operating there, based on the public utility benefits that will be made available to the community. Construction and financing decisions can be controlled in the first place by the for-profit developer. If the non-profit organisation retains control of the freed functions of the Joint Undertaking, this level of control would probably be sufficient for the UBIT+ control test described above. Murphy sees benefits in joint ventures, both for his business and for the nonprofits he distributes with. “People may think that it`s only because of the [public utility] name that there`s really no profit potential in their partnership, but that`s not the case. There are many ways for both partners to take advantage of it.

Many businessmen think that if you partner with a non-profit organization, it is essentially a philanthropic enterprise and you will give your time and resources, but it can be beneficial for all parties involved if you set it up correctly. “Another legal mechanism of `absorption` is the dissolution and asset allocation of a target organization. This legal procedure usually includes the adoption of a liquidation and asset allocation plan, the payment of unpaid debts, the transfer of all remaining assets to another non-profit organization and liquidation. If the non-profit organization that dissolves is exempt from federal income tax in accordance with Section 501(c)(3) of the Internal Income Code, the resolving organization is required to allocate its assets for one or more exempt purposes, in accordance with section 501(c)(3) code. Partners can make or break a project and all potential partners must be scrutiny. Nonprofits will want to make sure they choose a partner who brings the expertise they need and treats them fairly. To this end, LISC Indianapolis has developed some guidelines for nonprofits that can be used in the selection process. Community development joint ventures typically take place between one or more nonprofit developers and one or more for-profit developers, but utility and public benefit joint ventures are also common. Two community organizations that serve Indianapolis Near East Side — Englewood Community Development Corporation and John Boner Neighborhood Centers (JBNC) — have made an art of partnership. . . .