We've been discussing obtaining non-profit status for either our club or as a statewide entity for all state clubs for quite some time, but would love input from someone who has been through it. Anything helpful and/or as much detail as can be provided would be of much help to us. Hopefully this process wont take as long as I've heard, so we look forward to getting all the facts if you're out there and willing to give us a little shove in the right direction!

Thanks!
Jebb Long
Vice President
http://www.discgolfbirmingham.com

Hi Jebb,

I'm part of the Mile High Disc Golf club in Denver. I know we did this. Check out our website at milehighdiscgolf.org and go to the contacts page in the upper left and you'll see a way to email club officers. Try president John Bird (aka know by his initials JEB) and he can direct you from there.

Good luck

Pete Kenny
PDGA 6002
Boulder, CO

It's not too much of a hassle Jebb. I have gone through this with two DG clubs.

What you want to do is to set yourself up as a 501(c)(7) - Recreational club organization. When I last did this in 2002, the filing fee was $150. You have to complete some paperwork; basically just questions about what the organization will be doing. I think as long as club income is used for expenses in running events and the like, the IRS is happy. I also seem to remember that as long as your gross receipts are below a certain threshold, you don't have to file a tax return. Most clubs running one or two sanctioned events per year stay within this threshold, unless you're running a major or NT event.

I'm sure you can probably get the forms online through the IRS. There may also be an instruction booklet to guide you through the process.

http://img530.imageshack.us/img530/2550/brokenrecordko3.jpg

Mike Kernan posting his self portrait. How cute.

Thanks for the info all, we'll get the ball rolling and may be in touch.

OK, here's a question which came up from our club Pres.

What if Wal Mart says "hey we want to sponsor your club or tourney with $500 cash and/or merchandise"? (Walmart will certainly report such a gift to the IRS)

How would that work? Wont that be taxable income as a 501(c)(7)?

Seems like the biggest concern is protection from either the club or club officers being responsible for a big tax bill should we misunderstand the circumstances.

to obtain non-profit tax status you first have to incorporate. to incorporate takes a lawyer. you know what that means, money. about $1000. it would also help to talk to a CPA about taxes if you are unsure. this also entails money.
good luck

let me rephrase. unless you want a year long migraine just pay a lawyer to get you started. they will help you with forms, fees, bylaws, and usually will host your first quarterly directors' meeting.

Jebb, I think "big" corporations want only to give to "legit" charities/orgs and thus restrict their donations to such folks. They consider such donations as a business expense etc, doesn't matter to whom the monies/good flow. It's just an expense like any other. Such a requirement is an easy gatekeeper since those companies get approached by about everyone with their hands out.

Going legit has benefits and costs; I wouldn't try it unless the local club has some dedicated folks who don't mind paperwork and spending some bucks to become legit and stay legit.

I think that it would be easier for a local club to run a charity event by using the local charity directly. Collect donations for the event on behalf of Our Local Charity (whoever you partner with). Run the event, donate the proceeds, etc. That takes a more hand-in-hand relationship approach but could bring the full legitimacy of the charity into effect without the nagging paperwork, lawyers, CPAs etc.

For the long term, if a club is doing big business and possibly coming under some authorities Radar, bona fide status of some sort or another is a good idea, albeit a somewhat expensive and time consuming one

Joe

We incorporated our club as a non-profit in our state for $20. There is a form. All you have to do is fill it out and send in your charter/constitution.

What's the official designation you have, Mark?

My understanding is that 501(c)3 type status is harder to get, but unfortunately that's what a lot of companies are setting as their first hoop for beggars to jump through.

Joe