Legal Question in Administrative Law in California

We are 3 private companies primarily doing business in the water conservation business. Our direct clients are all consumers. However, the best way to get our product to market is through the government agencies and water municipalities. The water municipalities can use our product to drive conservation through their customers ( homeowners ).

We have learned that gov agencies and water municipalities will not endorse 1 company's product. They feel it is a conflict. Therefore, they have indicated they will endorse the system and product, then offer 3 choices ( our 3 companies ) to purchase the product from.

What comes to mind is a foundation and a consortium. We want to create the best story we can as we approach the gov agencies. Do we start a foundation? what would the benefit be? or do we just find a current foundation, interested in water conservation, to give money to?

How do we group ourselves together ( yet remain separate ) and have a an outlet where we give a portion of our money away? Can we give it to ourselves?


Asked on 10/28/09, 5:00 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

Doesn't the Milk Advisory Board come to mind? You could form such a a trade association that can promote its members and products while getting government endorsement for the trade group and 'product'. If serious about doing so, feel free to contact me.

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Answered on 11/02/09, 7:19 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

What you are describing seems to me to be a "trade association." You can search the Web under that heading and get lots of leads. In particular, note the site for the American Society of Association Executives (ASAE). There is a substantial body of law on what trade groups and associations can and cannot do without antitrust implications. Such organizations may qualify as nonprofits, but probably not as tax exempt in the sense of an Internal Revenue Code 501(c)(3) that can receive donations. This may not matter, since association dues are probably deductible anyway; and the trade association likely could qualify under IRC 501(c)(6).

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Answered on 11/02/09, 7:22 pm


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