Hacker News Reader

> and they had to stop being a non-profit and become for profit, which, at that point, costs $1 million to convert. I presume this is because non-profits must give away their assets to another non-profit if they cease operations.

I'm not sure I follow the logic here. If they weren't a non-profit, why would they have to give their assets to a non-profit in order to convert (and why would this cost them $1 million)?

View on HN

Besides this, I don't see why they would need to convert their status. There are almost no restrictions on running a non-profit, beyond not having "owners" or paying dividend.

The restrictions only apply to non-profits that want to be tax-exempt by the IRS. If you aren't considered charitable enough, then you just pay taxes as usual, but nobody is going to force a shut down of the non-profit because of that.

There is some maximums in the law that make non-profit status problematic. I worked for a non-profit that had for-profit parts because they had exceeded some of the limits. I'm pretty sure (although its been almost 20 years) that the problem was number of employees and their salaries.

Reply on news.ycombinator.com