Welcome to our transparency page. We get a fair number of questions regarding our nonprofit status so we decided to create this FAQ page in an attempt to answer all of our supporters’ questions. Hopefully this page will clarify and address anything you might want to know about our nonprofit status.
Is Canopies for Kids a “Not For Profit Organization”?
Yes! Canopies for Kids is incorporated as a not for profit company in the State of Illinois. However, we do not have Federal 501 (c) (3) tax exempt status for nonprofits at this time.
Is Canopies for Kids a 501 (c) (3) nonprofit?
No. Again we do not have Federal 501 (c) (3) tax exempt status at this time. We have looked into getting it, and we are continuing to look into applying for it, but we presently do not have it.
Can Canopies for Kids be a not for profit organization without 501 (c) (3) status?
Yes – being a not for profit and 501 (c) (3) are not exclusive; 501 (c) (3) status is mostly just about tax implications.
Why does Canopies for Kids not have 501 (c) (3) tax exempt status?
Well, we’ve consulted a few lawyers who believe that due to the transactional and resell nature of how we operate, which is different from most 501 (c) (3) not for profits that run entirely on donations, that the IRS likely won’t approve us for the status. In fact, even if we tried to restructure how we operate there’s still a very reasonable chance we won’t get approved.
How would being a 501 (c) (3) nonprofit be different from Canopies for Kids current status?
If we got 501 (c) (3) status it essentially just means that as a not for profit we wouldn’t have to pay taxes, would have to balance our books a certain way, and we could issue receipts for donations to the people that donate to our organization so that they could then submit them on their own tax returns. We’d love to be able to provide our supporters with that option, but unfortunately it’s rather complicated to get the status to do so.
Does Canopies for Kids have plans to file for 501 (c) (3) tax exempt status?
We’re going to continue to explore the option of getting 501 (c) (3) status, and if you know a good lawyer with a great understanding of nonprofit accounting that’s willing to help us out pro bono, please let us know. But ultimately, it appears to us that getting 501 (c) (3) status is going to be a rather expensive, complicated, and time consuming journey that may or may not be the right fit for us. Also because there’s a rather large non refundable application fee, we want to make sure that if we do apply for 501 (c) (3) status, that we do it right.
What does the $20 for the kits go towards?
Even though we are not a 501 (c) (3), we are still committed to being completely transparent regarding how we arrived at the $20 cost; and that’s entirely towards the costs of our kits, our operating expenses, and the built in donations to the hospital. To give you an even better idea of that breakdown – approximately 50% goes towards the cost of the kits, about 25% towards operating costs, and 25% is reserved as a built in donation to the hospital.
Do the Canopies for Kids founders pay themselves?
Hopefully one day. After-all, even 501 (c) (3) organizations pay their employees. In fact most people don’t realize we’re just a two person shop, and that outside of Canopies for Kids we both have to hold down full time jobs. To date, our organization has been funded primarily out of our own pockets, credit cards, and with the help of a few generous friends and family members, but right now we’re still working on paying ourselves back for all our costs. We’ve put a lot of time and work into our organization and we’re very excited to see it grow. If one day we could find a way to grow it into something that we could do full-time we’d be thrilled; but the truth of the matter is that our organization was never setup with our financial well being in mind – it always has been and always will be all about the kids.
If you have any additional questions about our nonprofit status, feel free to <contact us> and we’ll be happy to answer them for you.
Canopies for Kids