UPDATE: Nonprofit That Converted to “B Corp” Status Had Its 501(c)(3) Application Apparently Rejected by IRS

I previously blogged about the reported decision of CouchSurfing.org to because a “B” or “Benefit” corporation in order to receive significant investment funds.  It just came to my attention through the ARNOVA list-serv that CouchSurfing.org had previously sought unsuccessfully to receive recognition from the IRS as a tax-exempt section 501(c)(3) charitable organization.  Here is the explanation from the organization’s website:

“When we started CouchSurfing, being a non-profit was the best option that we could find to make sure that we achieved our vision. But achieving the top status for American non-profits — known as 501c(3) status — has turned out to be very difficult. Although we’ve operated as a non-profit financially, our mission isn’t traditional enough for the government to grant us this type of status.

So we need to make a change. After 5 years of trying to go in the direction of 501c(3), we’ve finally understood that this isn’t going to work for us. We need to find another structure in order to continue our progress towards a world where anyone can explore and connect.”

The website also provides a video with two of the organization’s founders explaining this history and the decision to pursue B Corp status instead.

LHM