Below Martket Rate Loan to Nonprofit as Seed Funding

X is a business enterprise which is owned by a nonprofit community development corporation. When fully operational, X will market agricultural products, thereby providing a marketing outlet for low-income farmers in a depressed rural area.

Y, a private foundation, makes a loan to X bearing interest at a rate less than the rate charged by financial institutions which have agreed to lend funds to X if Y makes the loan. The loan is made pursuant to a program run by Y to encourage economic redevelopment of depressed areas, and no significant purpose involves the production of income or the appreciation of property.

The loan significantly furthers the accomplishment of Y's exempt activities and would not have been made but for such relationship between the loan and Y's exempt activities. Accordingly, the loan is a program-related investment.

This is an illustration modified from examples provided by the Internal Revenue Service. It is not a legal opinion on the tax treatment of any specific agreement between a private foundation and other entity.




Social Entrepreneurship
Spotlight



Youths in the Middle East Address Unemployment By Creating New Businesses


Youths in the Middle East Address Unemployment By Creating New Businesses

Youths in the Middle East deal with the world’s social problems such as high youth unemployment rates. As a solution, some are creating new businesses with a social purpose, such as tackling environmental issues, illiteracy or health, while also spurring job creation.




Social Services Jobs in Pennsylvania

  Foundation Related Jobs
  Fundraising & Development Jobs
  Substance Abuse Jobs
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  Substance Abuse Jobs



Federal Government Grant and Assistance Programs



Edited by: Michael Saunders

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