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How the Grateful Dead Played a Part in BTP Becoming a 501(c)3 Nonprofit

Author Andy Chan has been with BtP since 1994.

Books to Prisoners is federally registered 501(c)3 nonprofit and has been since 2009 (donations to BTP are tax-deductible!). But for decades like many small charities we weren’t a 501(c)3, not least because the cost of applying seemed prohibitive, and the number of donors asking if they could deduct their donation was so few. But we did have a few such donors, so to accommodate them we had a fiscal sponsor. A fiscal sponsor is typically a more established 501(c)3 nonprofit which has the organizational capacity to receive donations on behalf of a non-501(c)3 nonprofit, provide tax write-off for the donor, and then pass the funds (often minus a processing fee) on to the non-501(c)3. All good.

In 1995 the Grateful Dead’s charitable endeavor, the Rex Foundation, donated $10,000 to BTP. At the time this was an unprecedented donation. It could pay two-thirds of the postage of all the packages BTP sent out for a year. As required we sent the check to be processed by our then fiscal sponsor on the East coast, and sat back and waited. And waited. And waited.

After several months and multiple fruitless attempts to contact the fiscal sponsor they finally responded. They had lost the check. Sheepishly, we had to go back to the Rex Foundation and ask if they could possibly re-issue the check.

BTP didn’t apply for our own 501(c)3 status for more than a decade after this debacle, but it remained a very sore point and was inevitably cited first whenever we debated the issue.

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