501 3 (c) Tax Exemption

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Just wanted to find out if others have attained this status.. and if you have what steps did you take to get there?! I have gotten different answers from most people I have talked to.. Is the 501 3 c worthwhile?? What else can you do to be tax exempt.

Look forward to others responses!

 

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Switch over to the Democratic party! They never pay taxes!








Sorry, couldn't resist!;&;&

 

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Well it's generally the only way you can get coroporate sponsorships. Corporations want to be able to deduct (from taxes) any contribution they make to a ball team just like their donations to the United Way.

The down side is you will have to play by the IRS rules and keep track of the money coming in and money going out.

 

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I think if you are a big organization, it is great. If you are a single team or small organization, I wouldn't recommend it. It is a pain in the butt to get and not worth the effort unless you have BIG contributors. I say worry about finding the right players and making sure it is a team that will last more than a year or 2 before you bother with it. If you find that your team will not fold after a year or 2, then apply for it.

 

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There is a huge form you have to fill out (something like 50 pages) and you have to include a lot of stuff with it... things like your EIN and bylaws. If you are a smaller organization and you are looking at doing things the right way while keeping the amount parents have to pay low, then it is a good idea because corporations will be more willing to give you sponsorship money.
You give them your number and they can write off what they donate to the organization. A lot of places will be reluctant to give you money if you don't have one.

 

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Switch over to the Democratic party! They never pay taxes!



Sorry, couldn't resist!;&;&

:lmao: They are the taxer's not the taxee's

I think one reason many small org's or single teams hook on with a larger org is so they get the benefit of the 501 thing with-out the hassle of getting their own.

 

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checked into this a couple times. You have to file initial articles of incorporation with the secretary of state to be recognized as an organization for non profit ($125 filing fee) and you have to file form 1023 with the IRS to be recognized as non-profit - $750 filing fee http://www.irs.gov/instructions/i1023/index.html
These fees don't include any attorney/accountant fees involved. If you are a smaller organization, start with $0 and end with $0 - no profit.
As far as corporate sponsors - in the past we have made a banner with the sponsors listed on it or listed them on the website - they can deduct it as an advertising expense - whether it is the same benefit to them as donating to a non-profit organization - don't know.

I am sure there is someone out there in OFC world that can go into more detail, but that is what I have come up with in my research.

 

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we are going through it. Many need it to give you the money you would like to get..say 250-5000 bucks. Also helps when you get donations from places like Kings Island, to comply with the Kroger's percentage kick backs, and various other larger companies. With some help we hope to keep it under $1000.00. First part is free... getting an EIN number... incorporation... then the actual filing. You need a "friend" to get some of the verbiage right and to reduce "attempts" and some free time to do it. Part of my trouble has been time.

I'm not limiting having the 501c3 status to "size". If you want to increase donations and reduce costs for your team.... get it! In the end it reduces everyone's costs and in these times.... enough said...

 

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501 3 (c) or not, companies can write off sponsorships as advertising expense so it shouldn't matter. If you have relationships, you can still get the sponsors.

 

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true. Just depends upon the company...

 

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You can submit your 501 (C)3 as an ASSOCIATION. That way you don't have to incorporate

 

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is there a benefit of being an Association vs an Inc.??

 

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is there a benefit of being an Association vs an Inc.??

Less paperwork, plus you don't have to pay the fees for incorporation. Check into it, much easier route to take.

 

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we had to pass up a couple oppurtunities becasue we did not have the 501 number. I read all the replies. So instead of asking a corporation for a donation or sponcership, tell them its for advertising. Is that a "loop hole", on the business end you would write it off as advertising??? in you deductions. Am I right? So approach the businesses in Advertisment mode (banners) and they will be more likely to give? I'm asking.

 

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I helped a softball organization a few years ago become a 501(c)(3). It was a lot of work, but we did the paperwork ourselves. It also helps if you find another organization's Articles of Incorporation and/or Bylaws to help you get started rather than creating them from scratch.

I am thinking back then it cost us about $650-750 total. There is a cheaper amount that we didn't qualify for, and if I remember correctly, it was because we had too much money going in and out of the organization.

One more thing, the total submission was around 10-15 pages, but many of those pages were attachments that sometimes only had a paragraph on them.

 

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Have read all the responses--having done 4 of these now, I can tell you it is truly not that difficult. I always made sure we had a CPA on board, we handled the pw between us. The IRS office I delt with(in MD, IIRC) was actually very helpful, and let us amend pw on one of them without making us refile /repay. We did it for the reasons above, many of the large corps won't give you a penny w/o the "charitable" designation. One problem--make sure you have COMPLETELY vetted anybody you plan on having on your board, because there is no time like in the middle of everything having an IRS agent tell you one your Board has a "major tax problem;&..." Felony convictions, liens, etc. can turn your app. fee into a contribution real fast. And remember, if you go as an Ohio corp. you have to file all the Ohio pw on a timely basis, and make sure you do the follow-up pw on a timely basis.And, if you are getting all the services provided voluntarily, it goes a loooong way if you actually thank the person/people who helped you after it is done.

 

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have read all the responses--having done 4 of these now, i can tell you it is truly not that difficult. I always made sure we had a cpa on board, we handled the pw between us. The irs office i delt with(in md, iirc) was actually very helpful, and let us amend pw on one of them without making us refile /repay. We did it for the reasons above, many of the large corps won't give you a penny w/o the "charitable" designation. one problem--make sure you have completely vetted anybody you plan on having on your board, because there is no time like in the middle of everything having an irs agent tell you one your board has a "major tax problem;&..." felony convictions, liens, etc. Can turn your app. Fee into a contribution real fast. and remember, if you go as an ohio corp. You have to file all the ohio pw on a timely basis, and make sure you do the follow-up pw on a timely basis.and, if you are getting all the services provided voluntarily, it goes a loooong way if you actually thank the person/people who helped you after it is done.

amen, brother!

 

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That's the best advise I've heard all year!!