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We have developed a social website to improve the communication

Resolved Question:

We have developed a social website to improve the communication among parents of schools going kids. Our product users (school kids parents) love the functionality and want to use it. However, most school districts and school principals are not approving to use our product in public schools stating that they can only allow and endorse only “non-profit” organization’s products in the public schools. Without schools approvals, we can't scale our business model.

We have two goals and expectations from this product: 1. “Do Social Good” by improving the parent’s communication 2. “Earn Money” by showing online/banner ads to the parent’s users using our website.

To achieve above goals, we are considering setup a Non-Profit organization 501 c3.

From the profits, we will pay our salaries and operational expense, and re invest the remaining profits into our website; so it full fills of our goal of doing “social good”.

1. What are your thoughts/view on setting the non-profit organization for above goals? W can’t urn this program under S or C-corp as public schools don’t encourage “for-profit” programs.

2. Are there any restrictions on the amount of salary withdrawn by founding members of a "non-profit" organizations?

We are 3 ffounding members based in Calfornia.
Submitted: 5 years ago.
Category: Business Law
Expert:  NYLAWLADY replied 5 years ago.
The guidelines for a 501 c(3) are strict and it doesn't sound like you fit those guidelines see,,id=96099,00.html for specific information. Unless you fir those guidelines exactly you will not be eligible for 501 c 3 status and the schools will therefore not endorse the site.
Customer: replied 5 years ago.

Thanks Attroney, for yoru advice. Looks like, our current model will not fit into the Non-Profit category without major changes to our model.

We are ready to give-up our secondary goal of "making money" from thsi website, and focus on the primary goal of "Doing good to improve the communication among kids parents".


Do you see a way to qualify us under Non-profit organization? if we are ready to make above and any other changes. I am just trying to accept all changes as our company will die other wise anyway

Expert:  NYLAWLADY replied 5 years ago.
you will need more than that. the 501 c 3 must actually support a group that it is helping- such as the pta or another not for profit group and you must show what you are doing in a concrete fashion.
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