Understanding Nonprofit Basics

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By incorporating as a not-for-profit organization, Stellar Development Foundation has voluntarily set itself to a more restrictive set of legal requirements than a traditional company. In preparing our application for tax-exempt status as a charitable organization, we are aware that achieving tax-exempt status will subject us to an even higher level of legal oversight and transparency requirements.

Given the complexity of nonprofit and tax-exempt law, we asked our nonprofit legal counsel, Adler & Colvin, to prepare a memo that covers some of the more frequently asked questions about Stellar’s nonprofit and anticipated tax-exempt status.

You can read or download the memo here.

For handy reference, here are some of the requirements we must comply with now and in the future:

Requirements of a not-for-profit organization

  • No stock
  • No profits can be given to individuals
  • No private inurement

Some of the requirements of a not-for-profit AND tax exempt organization

  • All compensation for nonprofit staff must be reasonable
  • Executive compensation shall be published with annual tax filings (Stellar has been publishing aggregate amount of stellar compensation for the entire team since July 31, 2014)
  • Annual financial reporting is required (Stellar has gone beyond these requirements by publishing preliminary unaudited quarterly financials)

Read Stellar’s Nonprofit Status Memorandum

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