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What does it mean to operate a 501(c)(3), public non-profit corporation?

Simply speaking, it means that John and Carla Sherman are the principal officers of a corporation that has been granted non-profit status by the IRS.

The process required to be granted that status began with the incorporation of the RiverGanga Foundation as a California Nonprofit Public Benefit Corporation on December 20, 2000. Upon the completion of the process of incorporation, we began the process of applying for non-profit exemption from the IRS. This process entailed a total of five years supervision by the IRS at the end of which we were granted full exemption from state and federal corporate income tax.

There is little or no difference in the day-today operations of a for-profit and a not-for-profit corporation other than that the income of a not-for-profit corporation is not passed on to anyone. The standard profit and loss accounting requirements are the same as they are for a corporation formed to generate income for stockholders, but there are no stockholders in a public non-profit, and no profits are distributed to anyone.

In a public non-profit corporation profits can be spent only on programs in service to the mission that was defined in the IRS application, on salaries for staff, on equipment needed to serve the mission, and on general operating expenses. We are required by the IRS to file a comprehensive annual report designed to insure that the organization remains in compliance with the rules.

We, John and Carla Sherman, are the only employees of The River Ganga Foundation. Back in 2002, our salaries were approved by our Board of Directors to a very reasonable maximum of $30,000 a year, but we have never been able to pay ourselves that much. In fact, until the beginning of 2015, we have each averaged about $6,000 annual salary, and we file our income tax return jointly. In all that time, our combined income was already $4,000 below the federal poverty level in the United States, which in 2016 was $16,020 annually for a household of two. Since the third quarter of 2015, we have been unable to pay ourselves anything at all for full-time work. We only get paid after all other foundation expenses are met.