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The Scarlet & Black

SEG in process of applying for non-profit status

The Social Entrepreneurs of Grinnell (SEG), a student organiztion that provides interest-free loans to struggling businesses abroad in developing countries, is applying for non-profit status. Members of SEG said there are financial and organizational benefits to obtaining a 501(c)(3) status from the IRS.

According to SEG co-leader Harry Krejsa ’10, non-profit status would have the potential to improve the group’s financial situation. Under 501(c)(3) status, donations to SEG and their fiscal transactions would be tax-exempt. “Once we’re an official non-profit, people will be able to give tax-deductible donations to us, making larger donations easier and more attractive,” Kresja said.

Members also said that non-profit status would allow SEG to extend beyond the role of a typical student group, within and outside of the context of the College. “We feel that becoming non-profit will seriously increase the legitimacy of SEG in the eyes of the government, on campus, and in the greater Grinnell community,” co-leader Emily Kugisaki ’09 wrote in an e-mail to the S&B. “We hope to continue expanding and growing into the community as more than just a student group.”

The application process, which began last semester, has required the formation of a Board of Trustees, consisting of students and community members, as well as dozens of pages of paperwork according to Krejsa.

“It has taken many weeks just to get all of the materials and documents together that we need to complete the application because we basically started from scratch with nothing more than a vision for SEG,” Krejsa said. “We had no bylaws, charter, no ‘official’ rules for anything.”

With much of the preparation finished, SEG has already submitted the state non-profit status application and soon will submit the federal application. “The federal one is significantly more in depth. We’re essentially done,” Kresja said, “We’re just putting all the various pieces together and we’ll have the application off in a couple of weeks. We hope to become an official non-profit in a year.”

According to Kresja, non-profit status will not change the basic function of SEG. “Even if we’re a non-profit, it doesn’t mean we can’t make a profit on our loan,” Krejsa said. “If we come out ahead on repayment of loans, that money will just go straight back into the pot to grow our portfolio, to add to the principal of someone else’s loan.”

Doug Caulkins, director of the Wilson Program in Enterprise and Leadership, a member of SEG’s Board of Trustees, said that SEG has proven itself as a role model student group. “This is exactly the kind of program we encourage to see on campus … enterprise means creativity, and SEG has done just that—effectively and for social cause,” Caulkins said.

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