Nonprofit foundation question?

So just want to clarify something. 

Let's say there's a private company that provides some kind of courses for kids for $500 in a developing country. 

They now want to start a scholarship program to give said courses for free to kids from lower income families.

In order to fund this scholarship program, they are starting a nonprofit 501c3 foundation and looking for donations. 

All donations will go to pay for the scholarships. So basically all donations go back to this private company. Because more kids taking courses = more money for the private company.

Is this legal? Is this ethically right? Will this have any chance at even getting donations?

Thank you


Technically they are helping expand education over there by providing free courses. But free because someone else is paying for them and they themselves are getting the money. It just seems wrong, but also super illegal

Update 2:

They're reasoning is that the money is going to pay for teachers salaries, overhead costs, supplies etc. 

1 Answer

  • Pat
    Lv 7
    2 months ago

     If they're starting a 501.c.3, it is nonprofit.

    If the money goes into the nonprofit, it's perfectly legal, although impossible for ALL of the donations to go toward scholarships.

    The org will have expenses - office space, equipment, supplies, insurance, utilities, staff, etc.

Still have questions? Get your answers by asking now.