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Section 501(c)(3) is the portion of the US Internal Revenue Code that allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations. Internal Revenue Service (IRS) regulations permit this status for organizations operating for a purpose other than to generate profit.
LifeStream, like all North American-based blood banks, charges hospitals a service fee for collected blood products. This fee helps cover the cost of our operations. This includes:
Fees charged hospitals are designed to cover expenses. Any extra money is re-invested in the blood bank operations.
LifeStream could not cover the costs associated with the collection, testing, processing and delivery of blood and could not continue to connect donors and patients through the gift of blood – the purpose under which it operates under IRS rules that govern 501(c)(3) organizations.
The fundraising income helps pay for many items, including new mobile coaches, donor beds, laboratory equipment, computers and other items the blood bank needs. All funds must be used to support the purpose of the organization – in LifeStream’s case, the collection, testing, labeling, storing and distribution of blood products to more than 80 hospitals and medical facilities in six Southern California counties. We are extremely careful and diligent about how those funds are used.
In accordance with state law passed in the 1970s, California requires an all volunteer blood supply.
LifeStream falls under different rules than centers that pay their donors to collect plasma. Those centers send their plasma to processing facilities where it is treated, modified, pooled with plasma from other donors, and turned into a commercial, for profit, product before it is given to patients. Further, the agencies that oversee our operations and finances require that we use an “all volunteer” blood supply, so under current laws, we cannot pay our donors directly for their collections.
Like all 501(c)(3) nonprofit organizations, LifeStream is subject to IRS regulations and reviews to ensure the organization continues to do the work that led to its receiving tax-exempt status. Failing to follow these guidelines can lead to fines and the loss of our tax-exempt status. Since its founding in 1951, LifeStream has never been the subject of an IRS sanction or discipline.