[GeoStL] Re: $$$, 501(c)
- From: "Jim Bensman" <jbensman1@xxxxxxxxxxx>
- To: <geocaching@xxxxxxxxxxxxx>
- Date: Mon, 12 Apr 2004 14:26:53 -0500
-
I work for a not-for-profit (501(c)(3)). Let me clarify a few things.
There are two types of 501(c) organizations and the differences are
significant.
There is 501(c)(3) and 501(c)(4).
A (c)(3) is what SLAGA should consider. A c(3) cannot use more than 25% of
the budget for lobbing and cannot electioneer. C(4)s do not have the
restrictions on lobbying and electioneering.
Donations to a (c)(3) are tax deductible while donations to a (c)(4) are not
tax deductible.
Many foundations, people, and companies who give donations require you to
have (c)(3) status (or have a fiscal sponsor-another (c)(3) that sponsors
you for the grant). For example, if you are a (c)(3), you can buy a 50
copy license for Microsoft Office 2003 Professional for $15. If you are a
(c)(4), you cannot.
Having a 501(c)(3) or (c)(4) does NOT exempt you from sales tax. Not for
profits can apply to the state for tax-exempt status. But you have to have
a letter from the state to be exempt.
Another issues is SLAGA should incorporate in MO as a Not-for-Profit
Corporation. I think you have to file out a form and pay a fee to the
Secretary of the State. There are likely requirements like bylaws and
officers. I think you have to be incorporated before you can get
501(c)status.
Incorporation also protects officers and members from being sued
individually. For example, if someone got hurt at a SLAGA event (waivers
promising not to sue are not worth the paper they are written on), the
officers of SLAGA could be sued. If SLAGA is incorporated and someone gets
hurt, only SLAGA can get sued. You also have to be incorporated to sue
someone.
So I think SLAGA should incorporate ASAP and seriously consider 501(c)(3)
status.
Jim Bensman
"Nature Bats Last"
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