Eat for Equity Catering, SBCposted: Tuesday, December 26th, 2017
Eat for Equity is a nonprofit, and by the end of the year, will be separating our growing catering program into a benefit corporation owned wholly by the nonprofit.
The nonprofit will be be the sole shareholder of the benefit corporation [b-corp], a specific benefit corporation called Eat for Equity Catering, SBC.
Why go this route? Eat for Equity began catering to expand the impact of our food-centered philanthropy and community-building, and to provide sustainable financial support for our community feasts and management.
Our catering program has ben “unrelated business income” for the nonprofit, which means that it isn’t considered central to our mission, and so is subject to tax. Once the catering program generates a substantial and disproportionate amount of revenue compared to mission-related activities, it starts to threaten the nonprofit’s tax-exempt status.
By separating the catering program into an independent benefit corporation, we protect the nonprofit, and open up possibilities for the catering company to grow.
What’s a benefit corporation? A benefit corporation is essentially a for-profit entity that is socially-minded. It has both business and charitable purposes, and built into the structure of the company is the idea that it will create social benefits as well as profits. Eat for Equity Catering will be a Specific Benefit Corporation, though there are also General Benefit Corporations. Other b-corps in Minnesota include Peace Coffee, Finnegans, and Events by Lady K. Read more information on benefit corporations in Minnesota here.
What’s the purpose of the new benefit corporation? Eat for Equity Catering engages in:
- Promoting and modeling equitable and sustainable food sourcing
- Providing access to conscious food choices
- Using catering to support local nonprofit causes
posted in eating