My guild has been lookin into becoming a not for profit organation. why would we want to do this?
River rat
River rat
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Not for profit organation
- Thread starter river rat
- Start date
river rat said:
It's one of those things that sounds great at first blush. Tax Exempt. Donors get to deduct donations. Grants will miraculously be bestowed upon the club. Ability to participate in shows that are limited to non-profits.
The reality is that it is a lot of work to apply and secure 501(c)3 status. It's even more work to do all the paperwork that will be required after (if) 501(c)3 status is gained. Informal cash drawer "accounting" that may have been ok for an informal club will not be sufficient for a 501(c)3. A good grant application that has a shot at actually getting a grant can consume months of someone's time. Certain club activities and practices may no longer be acceptable under a 501(c)3.
If you have a core group of people that are willing to commit major amounts of time over the next 5 years to the success of the 501(c)3 then it can be a really good thing.
If your club members would rather be turning than doing paperwork and non-profit schmoozing with donors or if jobs/family/whatever limits the amount of time your members can commit to the club, then my advice is forget the 501(c)3.
Ed
What he said... looks to me like Ed knows a thing or two about 501(c)3
As a former officer of a 501(c)3 who did most of the paperwork, what Ed says is true.
The hoops are numerous and sometimes onerous to acquire this staus today.
Our 501(c)3 was formed over 30 years ago when they were quite easy to get. Today they are very difficult to get with more paperwork and hurdles than most people want to deal with.
If your guild is strongly into woodturning education programs it still might very well be worth that effort.
But be forewarned it is a ton of work.
Jim
The hoops are numerous and sometimes onerous to acquire this staus today.
Our 501(c)3 was formed over 30 years ago when they were quite easy to get. Today they are very difficult to get with more paperwork and hurdles than most people want to deal with.
If your guild is strongly into woodturning education programs it still might very well be worth that effort.
But be forewarned it is a ton of work.
Jim
Don't forget, you would be dealing with the government (devil). When the Arizona Woodturners first started working at becomming a 501(c) 3, the government insisted they were a football team and needed to apply for a 501 (c) 6 tax exempton, I'm not kidding, I was involved with this process. It took almost two years to convience them the Az. Woodturners were a woodturning/educational organization. It took about 20 months to get final approval with an enormous amount of work.
John Van Domelen
Retired Forum Admin
Very timely topic - my local AAW chapter is in the early discussion / planning stages of this.
So, have you guys (clubs that have gone through this process) found it to be worth the efforts expended?
So, have you guys (clubs that have gone through this process) found it to be worth the efforts expended?
Becoming a not-for profit is not much different from incorporating. What is it you are after. You still have to file all the yearly forms. the regulations must be followed and the accounting up to accounting standards. Any income you derive must be realted to the educational or purpose of the application or you still have to pay taxes and file additional forms. If all your after is protection for the memebers incorporation or insurance might be a better approach. For a small group with limited income from eductaional actvities there is not much advantage in becoming a not-for-profit. Was in that sector for 20+ years.