SCHUMER CALLS ON IRS TO SWIFTLY REVIEW LAUNCH NEW YORKS APPLICATION FOR NOT-FOR-PROFIT STATUS EXPEDITED STATUS APPROVAL ENSURES LAUNCH CAN USE PROMISED GRANT FUNDING, INVEST IN NEW TECHNOLOGY IN BUFFALO
brbrSchumers Request Comes After Launch NY Applied for Expedited Tax-Exempt Status in Order to Ensure State, Federal Funding Is Safe Will Be Used Towards Investing in Research and Technology at Roswell, UB Other Upstate Research InstitutionsbrbrTypically, Not-For-Profit Status Can Take Over a Year for Approval, But Schumer Noted Delays for Launch NY Could Extend Vacuum in Seed Funding in WNYbrbrSchumer: Swift IRS Action Would Allow Launch to Turn Research into Business Success in WNYbrbr
Today, U.S. Senator Charles E. Schumer urged the Internal Revenue Service (IRS) to swiftly review a request by Launch New York to receive notforprofit status so that promised grant funding that hinges on this status, such as federal Economic Development Administration funding, is not delayed or lost altogether. Launch New York is a new Venture Development Organization led by the University at Buffalo. Typically, achieving notforprofit status can take about 18 months, but Schumer is urging the IRS to expedite this approval so that Launch New York can invest in technology being developed at places like Roswell Park Cancer Institute, University at Buffalo and other Upstate New York research institutions in the near future. Schumer has been working with Launch New York for approximately two months in their pursuit of this status, and today he emphasized that the IRS should waste no time in their issuance of a determination letter, given that much of the organization's planning and budget depend on this status. Schumer noted that Launch New York was developed to address the seed funding vacuum in Upstate New York, and without this expedited review, that vacuum could continue to exist for another year or more.
"The IRS must not skip a beat in their determination for Launch New York's notforprofit status so that promised state and federal funding for this new organization is not delayed, or lost altogether," said Schumer. "Often achieving this taxexempt status can take more than a year, but when it comes to turning research into business success at institutions like Roswell Park, University at Buffalo and others, there is no time to waste. Western New York has waited long enough for an institution like Launch New York, and their grant funding that hinges on this IRS status, cannot be lost or put at risk of serious delay."
In February 2012, Schumer announced that the Economic Development Administration (EDA) had heeded his call and awarded a $637,000 award to "Launch New York". This massive investment will allow "Launch" to provide a bridge to boost a 27county region, spanning from Erie County to Delaware County, to develop the atmosphere needed to transform the technologies and ideas generated at universities and research institutions into commercial successes. The John. R. Oishei Foundation will match this federal award. However, this EDA funding hinges on Launch New York's notforprofit status, and allocation will be delayed until this status is approved by the IRS.
"Expediting our 501 c 3 application is critical to helping us secure additional funding and allowing us to move forward with our important work. Once we are granted this nonprofit status we will be able to use the funding we have already obtained to help support entrepreneurs, grow new companies and create jobs across Upstate New York. I want to thank Senator Schumer for helping us expedite our application and for continuing to be a strong supporter of Launch NY" said John J. Seman, President & CEO of Launch NY.
Upstate New York was one of seven regions across the country chosen by the administration to participate in the JumpStart America initiative to accelerate innovation and entrepreneurship in order to create new jobs. Launch NY was selected as one of the new Venture Development Organizations (VDO) to receive federal funding under this program. These federal resources, coupled with private dollars, will support jobgrowth and entrepreneurship under the Administration's JumpStart America Initiative. With notforprofit status, JumpStart in New York will be a new job engine for the 27 counties in Upstate New York.
New research shows that startup companies are the lifeblood of an economy and are responsible for many net new companies. Therefore, regions that suffer from a lack of investment capital will also suffer from slow or negative job creation. The new Launch NY VDO will provide equity investments for startup companies in the Upstate New York region. During the first 28 months of operation, the VDO projects will invest $5 million in approximately 17 startup companies. The projection assumes that Launch NY will make a second investment in a significant number of these startups. They will also provide these companies with $1.6 million of advisory services. Schumer said that exporting the JumpStart model to Upstate New York and securing federal funding to kick start this operation could be a game changer for New York's economy.
The JumpStart America Initiative aims to accelerate, "outcomedriven, regional entrepreneurial initiatives focused on highimpact startup and existing firms to create hundreds of thousands of U.S. jobs." JumpStart focuses on supporting startups and young, highpotential firms as a means to generate jobs in the coming decade and help return the national unemployment rate to its pre2008 recession levels. The JumpStart America Initiative is focused on coordinating public and private resources to spur entrepreneurship across the country by accelerating regionallybased innovation and entrepreneurial ecosystems.
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