One option that has been implemented successfully is to form a new nonprofit within your existing for-profit business. The purpose of this new organization would be carry out the elements of your overall mission that fall within the parameters of the IRS tax-exempt regulations, even as you operate the for-profit business. Although it is certainly not a guarantee of success, this model has been followed by a number of organizations around the country that did indeed receive their IRS determination letters.

There are obviously many issues to be addressed. You'll need to explain how one space can be used by two different entities and who takes financial responsibility for the many items delivered to the businesses and possibly shared in the normal course of doing business.

A slight modification of this option is to form a parallel 501(c)(3). The new nonprofit could be financially supported, at least initially, by its for-profit parent. This particular model allows current investors to remain fully involved. Although they will no longer be investors hoping to see a financial reward, they may become contributors to the new nonprofit. As such, they will be able to deduct all or part of that contribution (depending on the unique particulars) from their personal income tax liability.

The parallel organization cannot be a carbon copy of the existing for-profit business. It must be organized as a self-sustaining nonprofit, following all the rules and requirements of any other 501(c)(3).