The the Princeton Regional Chamber of Commerce Foundation was formed as a vehicle to raise money for programs and has also been used to hold property and generate rental income to be used for program funding. The foundation has funded scholarships and staged more than 30 programs, most recently on social entrepreneurship for nonprofits.
The mission statement of the foundation: “to effectively focus the skills and resources of the greater Princeton business community on the critical civic, educational, scientific, cultural, and economic development interests of the region.”
In 2005, a house at 9 Vandeventer Avenue became available, and the chamber purchased the property and moved its headquarters from Forrestal Village back into the center of town. The chamber’s foundation acted as the property holder.
The foundation rented it back to the chamber, which occupied the first floor, providing the charitable arm with some much needed cash flow. The foundation also collected rent for apartments on the second and third floors.
Problems first arose as the foundation expanded its scope. Worthy programs such as the Educators Institute, which links secondary school educators with business’ workforce future needs, and the Kristin Appelget Civic Engagement Student Awards Program, stretched foundation dollars.
The income from the sale of 9 Vandeventer Avenue right in Princeton’s central downtown would unlock a magnificent chunk of funds into foundation coffers, just as their efforts were redoubling and spreading into a whole new set of programs. It further would help the chamber foundation in the eyes of the IRS.
Somewhere along the way, the Foundation had lost its status as a public foundation, defaulting to that of private foundation. Since it retains its 501(c)3 designation, this has not proven a particular disaster, but the many donor-friendly advantages of the public charity have made gaining it a worthwhile goal.
The IRS grants 501(c)3 tax deductible status to both private charities (numbering just under one million) and private foundations (about 108,000 at last count). Both organizations must be organized exclusively for charitable purposes. Both offer donors tax deductions, but within varying limits.
Donations to public charities up to 50 percent of the giver’s total adjusted income may be fully deducted. For many private foundations, this limit drops to 30 percent.
The public charity also holds certain benefits to attract government and other foundation gifts. It is a coveted status, which the organization must prove its worth to gain. Otherwise, the IRS defaults it into the private foundation category. One major hurdle is that at least 33 percent of a public charity’s funding must come from small donors (those giving less than 2 percent of the organization’s income.) For the chamber foundation, locked into income through real estate rentals, this was difficult.
The building was sold on March 30 for $1.1 million to Coastal Steel, which now occupies the office. The foundation is now striving to regain the public charity status.
Coastal Steel Construction of NJ LLC, 9 Vandeventer Avenue, Princeton 08542; 609-921-8178; fax, 609-921-8179. Marcie Shavel, president. www.coastalsteelnj.com.