501(c)(3)

  

A 501(c)(3) is the ugly government tax chitty way of calling a collective effort of people, aka a "company," a charity. But it sounds way more edgy if you call it a number. With a letter. Then a number.

Double 0-7. Way cooler than "James." Right? Well, 501(c)(3) is the United States legal code number that created space for Federally tax exempt charities. And there are 29 flavors of charitable category that they address. The government is working hard to catch up to Baskin Robbins’ numbers, but they’re not there yet.

Specifically, some of those 29 flavors include: religious organizations, scientific, literary or educational charities, charities for amateur sports, testing for public safety, charities involving cruelty to children, women, and animals (yeah, these are, uh... anti-).

So why the special treatment? Well, if a 501(c)(3) follows the many strict rules to maintain its non-profit status, then donors giving money to it get to deduct that money right off the top when doing their taxes. Like… if a taxpayer is paying 40 percent marginal tax, and they donate a dollar, that dollar only cost them 60 cents to donate. The U.S. Government essentially underwrites charitable donations, at least to a point. And that’s a good thing. We need noblesse oblige charities in the world. They do good work. Well, most of them do...

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Finance: How to Stay Rich91 Views

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finance a la shmoop. how do you stay rich after you get rich ? spend less than you

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make. how's that sound yeah genius. well but pretty obvious and

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easy to do if you earn enough money to do so, right? so if you're watching this [man sits down to eat]

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video you're either rich or you plan to be, and you want to stay that way pretty

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much forever until your doing you know the backstroke Six Feet Under.

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well the way in which you got rich in the first place here matters a lot. for

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many a long successful corporate career got them to the nice houses the

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convertible Ferrari the private school for the kids the custom golf club set

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and the wine collection. their wealth just accumulated slowly over time but

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likely in two forms. in America most senior executives receive nice cash

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salaries half a million a million a few million dollars a year. they live off

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that pay and save some of it. but their real wealth usually comes from partial

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ownership in the big corporations they run in the form of stock options. well at

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the end of a career the options might have compounded for decades and be worth

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tens of millions of dollars or more. typically the executives slowly sells [stock chart]

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off those options in retirement and looks back on an awesome corporate life

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optimizing the sale of soap or lawn fertilizer or car tires or whatever they

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did to get rich in the first place. not a bad way to go if the corporate gig is

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for you and you don't read about these people going bankrupt very often because

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a well let's face it they're probably pretty boring. or at least their career

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selling soap was, and B they got rich slowly accumulating wealth quietly

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almost hidden to them and to their friends over long periods of time. they

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were technically probably rich in their mid 40s or so and they just continued to

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dance the dance that brought them to the party in the first place.

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so that's the get rich slow plan and it is time-tested it works. but what about [people throw a party]

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the get-rich-quick plan you're a 260-pound runner with a four point four

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second forty. you can read so you were accepted to Alabama where you don't

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graduate. you're drafted by the Jaguars and you get a

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million dollar signing bonus. your buddies ask you hey pal what time is it

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you look confused they say Ferrari time and ah here's

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where our story gets sad. you forget a whole bunch of things mainly that it's

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likely your NFL career will be short and when it's done you will likely have the

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earning power of a high school football coach. like you know 50 60 grand a year

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or something like that not terrible just not rich. oh and there's this other thing

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called the taxes. that million dollar signing bonus was really nine hundred

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fifty grand after agent lawyer fees travel and other stuff then he paid [equation pictured]

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taxes of three hundred fifty grand and netted six hundred K in your pocket. but

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you just went out and spent four hundred fifty grand buy that Ferrari so now you

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have just one hundred fifty grand left in your pocket to buy that home how's

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this shoebox look. so you wait hope your rookie seasons a hit and as you drive

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around in your Ferrari you wonder if people will laugh at you if you happen

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to flame out and you realize too quickly that if you go to sell the car in two

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like eighty percent of them go fully bankrupt. which means that another ten to

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fifteen percent of them end up just really really really not wealthy. how can

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this be if they played in the NFL at least at one point wouldn't you have [pie chart]

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considered them to be rich or at least rich ish? no but something bad clearly

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happened here. well in almost every case at least one of three things happened.

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they spent too much money spent on junk they didn't need or couldn't afford like

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that Ferrari. B they invested their savings into restaurants or bars or

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other things where the odds of success were vastly stacked against them winning.

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or see they got divorced. yeah always a financial killer there. well want the to

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long didn't listen version don't spend your money like you're gonna make your

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current salary for the rest of your existence.

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stuff happens enjoy life but protect yourself by holding on to enough savings

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as should things take the ugly turn. invest wisely and all that and maybe see

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a marriage counselor. if you want to know what it all boils down to, keep making

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money yeah you never have enough because you know

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what's gonna happen. that doesn't mean you need to pound the pavement selling[man goes through air port]

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vacuum cleaners till you're 95 but you also shouldn't call it quits at 45

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because you're finally a millionaire yeah a million bucks just ain't what it

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used to be.

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