Access to capital is often the greatest hindrance to growth for non-profits. If your non-profit is looking to finance a facility or equipment, you may have access to the low-interest rates found with tax-exempt bonds.
You can use tax-exempt bond proceeds to fund the cost of acquiring or constructing capital assets, interest during construction, and other costs of issuance.
- Educational Institutions including Charter Schools
- Community Centers
- Senior Living Facilities
- Healthcare Facilities
- Any Facility used for activities related to the 501(c)(3) organization’s exempt purpose
Criteria for a 501(c)(3) non-profit to use tax-exempt bonds
- 100% of the project financed must be owned by IRC Section 501(c)(3) organization or the government.
- The bond proceeds must be used for activities related to a 501(c)(3) organization’s exempt purpose.
- No more than 5% of the net proceeds may be used for private trade or business.
- No prohibitied facilities (skybox, retail liquor, gambling, etc.)
- Read more about the general rules of non-profit eligibility