Many USA Fair Traders set up 501 Corporations to avoid paying taxes. The declaration of purpose of these non-profit corporations must claim to be helping the artisans and craftspeople in the Third World. These 501c’s do not trade (that is they do not make any purchases from artisans). generally, these non-profit operations are devoted to soliciting donations and to promoting the Fair Trade idea. If the Fair Trade idea were not functional,
then the non-profit status of all the very many Fair Trade 501c’s would come into question.
Most Fair Trade sites feature Donate buttons,
in the good name of the Third World craftspeople, this button
is from a faux-humanitarian company called Fashion & Compassion.
Some Fair Trade 501c non-profit corporations channel funds extracted from profitable
Third-World First-World buy-sell operations, into one’s own 501c non-profit account,
in the form of directors’ salaries and expenses, and/or to generate propaganda and advertising for Fair Trade as an economic concept, and referring to this a ‘charity’.
Commercial business-people should be careful to NOT use their 501c to wash money accumulated by marginal-profit making in the international jewelry business, for example.
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