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FAQ > LSG Foundation > What is the difference between the LSG Foundation and LSG Sorority, Inc.?

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In regard to our sisterhood, there is no difference.

Both organizations serve the same membership and share the same vision.

The purposes of LSG Sorority, Inc. are to “instill the desire for self-improvement, scholastic excellence, and the cultivation of civic responsibility, also to promote unity and higher education amongst women”. To that end, the LSG Foundation is being created to support and enhance the educational and charitable programs of LSG Sorority, Inc. The Foundation’s purpose is to provide a vehicle for the sorority to facilitate its own “civic responsibility”. Above all, the Foundation will ensure that funds are administered effectively for the long-term stability of our organization.

In regard to the IRS, the difference is great.

Nonprofit organizations are formed under different sections of the Internal Revenue Code, and this is the code that directs the activities in which the Sorority and Foundation are allowed to engage.

Lambda Sigma Gamma Sorority, Inc., along with most Fraternities and Sororities, fall under section 501(c)(7) of the Internal Revenue Code as a “Social Club”. Under this section, Fraternities and Sororities are defined as being “organized for pleasure, recreation, and other similar non-profitable purposes and substantially all of its activities must be for these purposes” and the vast majority of revenue must come from membership dues and fees. As long as the vast majority of revenue comes from members’ dues and fees, sororities and fraternities under this section of the IRS code are exempt from federal income tax on its net revenue, which is why these types of organizations are considered nonprofit organizations. 

The Lambda Sigma Gamma Foundation is being established as a “Public Charity” under section 501(c)(3) of the Internal Revenue Code. As a Public Charity the purposes of the Foundation are to support “charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and the prevention of cruelty to children or animals”, according to the IRS.  The Foundation’s revenue must come from a variety of sources including but not limited to: tax deductible gifts from individuals, corporations or organizations and income from investments. The primary limitations on the Foundation’s revenue sources are that one individual, group of individuals or organization can not consistently provide the majority of the Foundation’s income and that the revenue must be related to its charitable purposes. However, aside from paying for its own operating expenses, the use of the Foundation’s money is strictly limited to those activities the Internal Revenue Code allows, specifically charitable, educational or scientific aims.

Last updated on April 17, 2012 by Alexa Almazan