Employee Login

 

“Nonprofit” or “Not-For-Profit” Organization

ETC is exempt from income tax under Internal Revenue Code of 1986 (IRC) Section 501(c)(3) primarily because we are organized as a nonprofit, scientific research organization. The IRC defines “scientific research” to include both basic, purely theoretical research and practical "applied research" of the kind that ETC performs.

Furthermore, research conducted for a governmental entity is deemed by the IRC to be "research in the public interest." ETC primarily undertakes research, development, test and evaluation (RDT&E) activities for the United States Government (USG). Accordingly, the applied scientific research and development activities performed by ETC are in the “public interest”.

The USG’s Office of Management and Budget (OMB) Circular A-122, “Cost Principles for Non-Profit Organizations” defines ETC as a nonprofit organization which:

  1. Is operated primarily for scientific, educational, service, charitable, or similar purpose in the public interest;
  2. Is not organized primarily for profit; and
  3. Uses its “net proceeds” to maintain, improve and/or expand its operations.

To some laypersons “Nonprofit” may imply that ETC either does not or may not retain any surplus or show excess of revenue over expenses (“net proceeds”) in any particular period, which is certainly not true. A “Nonprofit” or the more descriptive term “Not-For-Profit” organization such as ETC may obtain revenues in excess of its expenses (“net proceeds”) because ETC is neither organized nor operated for the financial benefit of any individual or group of individuals.