Kudos to Erin Kee and Jason Foscolo for co-authoring this substantive article on the the choices of entities for farmers’ markets. I’m teaching the undergraduate food law course at New York University this semester. Today, I am lecturing on direct farm marketing and local food law. Erin and Jason’s article was included in the “recommended reading” for today’s lecture.
I think Erin and Jason did a nice job breaking down the various types of tax exempt organizations. It is a misconception that all not-for-profits are and should be a 501(c)(3); most not-for-profit organizations, including those that manage farmers’ markets, simply are not eligible to be one. I think most farmers’ markets fit nicely into the 501(c)(5) tax exempt category for agriculture and horticulture organizations. That said, donations made to a 501(c)(4) or 501(c)(5) are not charitable contributions for tax purposes; however, businesses are able to receive tax deductions for ordinary business expenses.
If you are considering starting a farmers’ market in your neck of the woods, please talk to a food and agriculture lawyer licensed in your jurisdiction.