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Joint Venture Policy
This policy shall apply to any joint venture with any taxable entity that The Ark shall participate in, and is designed to assure that the primary mission of The Ark is carried out and that The Ark’s tax exempt status is not compromised in any way.
Definition: A joint venture means any joint ownership or contractual arrangement through which there is an agreement to jointly undertake a specific business enterprise, investment, or exempt purpose or activity without regard to (1) whether The Ark controls the venture or arrangement (2) the legal structure of the venture or arrangement, or (3) whether the venture or arrangement is treated as a partnership for federal income tax purposes or as an association or corporation for federal income tax purposes. Not included in the definition are ventures or arrangements that meet both of the following conditions: (1) 95% or more of the venture’s or arrangement’s income for its tax year ending with or within The Ark’s tax year is described in Internal Revenue Code sections 512(b)(1)-(5)(including unrelated debt-financed income); and (2) The primary purpose of The Ark’s contribution to or investment or participation in the venture or arrangement is the production of income or appreciation of property.
In the event The Ark wishes to enter into a venture or arrangement involving a taxable person, the following shall be required:
- All agreements shall be in writing and shall be signed by all participating parties.
- The Ark shall receive adequate confirmation or control of the project to assure that the activity of the venture or arrangement furthers the exempt purpose of The Ark.
- The activity of the venture or arrangement shall give priority to exempt purposes over maximizing profits for the other participants.
- The venture or arrangement shall not engage in any activities that may jeopardize the tax exempt status of The Ark, including:
- A prohibition against political intervention
- A prohibition against substantial lobbying
- A prohibition against political contributions
- All agreements and other contracts between The Ark and the other parties to the venture or arrangement shall be on terms that are at arm’s length or more favorable to The Ark.
Only the Executive Director, Program Director or specific designates are authorized to enter into joint venture agreements on The Ark’s behalf.
Approved June 28, 2010