Automated selling for nonprofit

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hello nonprofit leaders uh looking forward to sharing some guidance on this important topic can a non-profit sell their assets well yes absolutely see nonprofits are corporations and they have the ability to buy and sell assets just like any other business uh there are some legal standards though that apply to nonprofits and those do vary from state to state so this is for informational purposes only and you definitely would need to consult an attorney if you're considering a large transaction but here are a few of the considerations that all non-profits do need to make in those decisions the first one is that whatever you're selling it the selling of that asset needs to support your non-profit's purpose well what does that mean i'd say it can kind of appear in two ways the first one would be that you're going to gift it or sell it to a like kind of organization to forward its purpose so it's not no longer something you need that you'll be using to fulfill your mission you may then be selling or gifting it to a similar non-profit to carry on the purpose the second thing would be that you're using the proceeds to fund mission critical initiatives so uh you can prove that then then chances are it's supporting your nonprofit's purpose uh the second thing is you want to avoid private inerrant a big word it um also is commonly referred to as self-benefiting or self-def dealing transactions and what that is is this is unique to non-profits in that we are not to as members of that non-profit staff board members et cetera to benefit from the personally benefit from the organization's uh tax-exempt purpose and so it shows up in the selling of assets because if you were to try to sell an asset at a discount to a staff member or give it to a staff member when you can sell it in the public space that would be considered private determined or self-benefiting and so you would want to sell any assets of the nonprofit in a way that demonstrates what's typically called an arms length transaction or the idea that you're doing it in a way that you would do it with somebody who wasn't related to an unrelated party uh so some practical ways to accomplish that um determine the price the fair market value what that what that asset will be sold for in the public space before you decide to sell it and then if you're selling it to a related party you've done that homework and you can prove it is definitely arm's length you just can't give it away or gift it to someone connected to the organization because they've earned it that would actually not be considered um legal for nonprofits the last thing i want to mention here is if a proper if if that asset or that property that you're looking at selling has been donated to you the nonprofit within the past three years and is valued at more than five thousand dollars you actually have to fill out a form and report it to the irs and to the donor and that's a form 8282 and it just is to let everybody know that you've actually sold that asset there are tax implications on an individual if that happens and so that donor has to know that and then of course the irs wants those types of transactions reported for some of the reasons i'm sure that we've already talked about today all right well do me a favor if you found this to be helpful would you consider jumping on um and liking me or following me on linkedin today i really appreciate it and i look forward to sharing more tips like this with you in the future