[BC] LPFM Operations

[wpio fm radio]

Bailey, Scott wrote:
> Can an LPFM (which is, by definition, noncommercial) sell airtime like
> that?

Yes Yes Yes it can.

Revenue is ok from any source: general support, specific 
program that is ongoing with or without the donation, and 
even the selling of a block of time.  That block of time 
must serve a nonprofit, noncommercial cause, of course.

The restriction lies in what happens to the proceeds (fund 
balance).  In a "for profit" entity, this is called owner's 
equity.

And it is the IRS, more so than the FCC that enforces this. 
  Interestingly, nonprofits that are not broadcasters who 
sell advertising, for example in a newsletter, must adhere 
to the exact same underwriter guidelines as the FCC requires 
for broadcast.

If they don't, it becomes UBI (unrelated business income) 
and is taxable)

Legitimate concerns over this thread should focus on what 
the nonprofit entity does with the proceeds not how it was 
contributed.

Nonprofits are not permitted to pay celebrity type wages to 
officers or directors.  This would equate to operating for 
profit.  They lose their 501(c)(3) designation for that. 
Remember it happened with United Way a few years ago.  The 
CEO's salary was as though he were working for a for profit 
entity.

You can look at the top salaries of every 501(c)(3) org at 
guidestar.org

But relax about if airtime was either sold or contributed 
toward.  Doesn't matter if or how much.

Randy Henry