LLC vs Nonprofit

LLC vs Nonprofit

We’re a brand new, family-owned company, so we’ve had a lot of questions about The Outdoor Kind, LLC. When people learn that our core mission is to support first responders and educate outdoor enthusiasts about the prevention of wildfires and other emergencies, one question frequently comes up: Are you a nonprofit?

Despite our philanthropic efforts, the somewhat surprising answer is no. That doesn’t mean that we don’t give a significant portion of the proceeds from sales to first responders, we do. We’re proud of that. And we’ll be instituting a campaign late this year/early next year in which 100% of the proceeds from sales go to our core mission.

There are two reasons we chose not to pursue nonprofit status at this time, however. The

Jan and I, the “owner-operators” of The Outdoor Kind, LLC, after hiking a section of the Otter Trail in South Africa’s Tsitsikamma National Park in 2009.

Outdoor Kind, LLC, sells fun apparel, featuring North American animals out enjoying the same sports we do. We then redirect a significant portion of our sales proceeds to our core mission and support those who help all of us. The more we sell, the more we give – and the higher the percentage that we can contribute, too.

If we were a nonprofit, according to IRS regulations, we couldn’t do that. Bear with me here for a lightly legal/technical explanation as I understand it: If a company sets up as a charitable and educational 501(c)3 nonprofit organization, that model of sales-to-contribution as its primary source of funding would be considered “unrelated” to our primary activities of charity and education.

At that point, the nonprofit could lose its tax-exempt status – and get in a lot of trouble with the IRS – even if it was a wholly volunteer organization and a full 100% of the proceeds from those sales went to the organization’s primary mission! I’m sure that this rule was instituted for good reason, particularly given the number of online scammers these days, but it makes it hard on small honest charities to start their activities.

One other possibility was to set up both a nonprofit and a business that gives a healthy portion of its earnings to that nonprofit. It’s obviously a lot more expensive to set-up and maintain two legal entities, but completely legal…unless those donations constitute a significant percentage of the overall donations to the nonprofit (which seems likely for a new/small organization). According to IRS regulations, that could then make the public charity a private foundation, and there are significant, prohibitive regulations on how private foundations must operate.

After learning of these regulations, we were left with a question: As a family-based organization, how can we do the most good and not have to worry about unintentionally running afoul of any nonprofit regulations? The answer was to found a limited liability company instead, one that directs a portion of all our sales to support-and-outreach efforts.

Right now, that means giving support to first responders, and conducting outreach to schools and summer camps, university clubs and outdoor groups, and the general public at large about fire safety and emergency prevention. As part of that mission, we’ll be speaking at numerous outdoors shows this spring, plus hosting booth displays at select shows as well. (See our Events section for more information.)

In the near future, we’ll also produce radio and television public service announcements to get the message out about the prevention of wildfires and other emergencies. And in the long run, we’re looking at documentary work and even bigger projects as well. There are some exciting things ahead!

In the meantime, we’re also preparing to roll-out the “Support the First.org” campaign, in which 100% of the net profits from select goods and services will go to our core mission. We’ll unveil the direction of that campaign in late 2017, and look forward to doing even more good as time goes on.

Our longterm goal is that, once our company is better known in the outdoors industry, we can expand this campaign to become a stand-alone nonprofit organization.  We’ll need the help of friends from user groups and industry across the spectrum of the “silent sports,” but I believe that reaching this goal is just a matter of time.

As lifelong outdoors enthusiasts, my wife Jan and I have been fortunate enough to do some amazing things in any number of beautiful places. And in all of those places, there were first responders somewhere who had our back if we – or the environment we were in – had serious trouble.

Consequently, The Outdoor Kind, LLC, is our way of paying it forward, helping to make sure that the next generation is as fortunate as we have been. Thanks for coming on this journey with us, and thanks again for being (the) outdoor kind!