I am thinking about starting a small charity to help find and support the "untapped Genius" in everyday people or people that might otherwise just end up in a dead end job or unemployed. The concept is to offer services that we help these people develop to companies and individuals that are looking for these services. We use the money to further help these ordinary people grow and establish their businesses in the hopes of create trajectory changing ventures and jobs in their communities.
I have thought hard about this and need help with one important factor: "tax incentive". The idea is to offer these companies the services and being a legal 501 c 3 charity, allow them to write these expenses off. Now I know that corporations and even smaller entities like LLC's and sole proprietorships can write off business expenses...but the question is this: Is there a benefit I can provide tax-wise because I am a charity vs these companies just paying for a given business expense and writing it off?
Business Model Tax Accounting Tax Structure
Is there a benefit i can provide tax-wise because i am a charity vs these companies justWell, aside from your buiness model being fundamentally flawed in that most of those dead beat people ARE dead beat people, not untapped geniuses, and you will have problems having a typical work drone establish a business and make some USD on the side for yourself,
paying for a given business expense and writing it off?
The idea of a charity is to allow people to write off an expense that normally does not further their income, and businesses write off all expenses. That is as far as the tax allows to be normally reduced.
No government likes to be screwed by some startup wannaby because it thinks it is cool, so no, there is no magic hole that allows you to magically make income and have your customers have a magic advantage over running a normal busienss.
And sorry, you being a charity is totally useless. Either you provide a service for people starting up a business - then you are a business expense already - or you dont provide a valuable service, then being a charity wont save your start up. Plus being a charity is not "oh, i am one", it is paperwork and costs and thus takes you down a hole to start - without any gain.
I think you either misunderstand the way that charity works or you misunderstand what is actually necessary to run a business or both.
So let's start point by point:
Now given all that people need to start or run a business the only thing that you seem to offer is a possibility of a tax write off for the services that they will provide you, which is actually worse then the situation of you actually paying them for their services because come to think of it: your expenses are A your possible revenue is B so you pay taxes on B-A and in your case A is an expense that still remains and B is a donation to your 501(c)3 which I can write off a part of(maybe whole) as a charitable contribution against revenue that I already received.
So as a starting business it seems to be a bad way to go since I have all these expenses (B+A) and $0 in my pocket.