Tax exempt status

[FTC4137]

We are currently fundraising for our team - and for some sponsors, it'd make a real difference if we had tax exempt status. We are not affiliated with any school or organization, so we can not provide that. I know we can register a non-profit, apply for the tax exempt status, etc - but it takes time and effort. Someone also mentioned to me that one could use one of "fiscal sponsorship" programs such as this one:

http://www.fjc.org/fiscal-sponsorship-program

where an umbrella organization that already has tax exempt status creates an account for you in exchange for 6% cut.

Has anyone any experience with this kind of programs? If not, how is your team dealing with tax exempt status problem? (Obviously, for teams affiliated with schools it is not a problem, but for everyone else...)

[JohnMcDonnell]

I got advice from another coach (Pearl H of team 4220 - you will see them in York) to find a local organization which already has a 501(c)(3) that you can attach to. Try guidestar.org to see if there's somebody nearby who might be interested in expanding into technology education. I have not followed this advice myself, however.

[System42]

The team I mentor has 501(c)3 status. I asked one of the adult mentors about your questions and this was her response:

Our situation was similar and putting the time and effort in on obtaining tax exempt status seemed like the best course for us to take. It has provided funding we never could have obtained otherwise. Too we have reaped additional benefits by belonging to our state’s non-profit organization. Their states non-profit organization probably has workshops on how to prepare the form or may be a good place for them to go for advice. I think they need to evaluate if seeking 501 ( c ) 3 status is worth it in the long run. How long does the team see itself existing? If this is something they are going to pursue for only a couple of years, then the 501 (c ) is probably not worth it. If they are in it for the long haul, then seriously consider it. There is a considerable amount of money that can be saved if they fill out the application on their own. We had to prepare our own because of cost. I suggest they also talk to people in their community to see if there is an attorney that would possibly prepare it pro bono. As far as the time element is concerned, I believe you can ask for donations while waiting on the application to be approved.

I am unfamiliar with fiscal sponsorship, so I cannot speak to that.
There is a document from 2008 that compares the two. http://fusionpartnerships.files.word...al-sponsor.pdf

[FTC9960]

We just lost out on a large grant because we lacked 501(c)(3) status. The grantor would also not accept fiscal sponsorship from somebody else. So we have gone after nonprofit status ourselves. There is a great deal of advice available online, so we did not feel it necessary to seek a lawyer's help. What also helps is the 1023-EZ simplified filing process if you are a small organization (less than $50,000/year revenue). We would need to grow an order of magnitude to hit that ceiling. Where we are in the process right now: Organized as a nonprofit corporation in our home state, obtained state and federal tax iD numbers, and filed our 1023-EZ. I will post again when/if we get our letter of authorization.

[korimako]

4H 'hosts' a lot of FLL & FTC teams - might be worth a call before all of the 501c3 efforts.

[FTC6389]

We are currently fundraising for our team - and for some sponsors, it'd make a real difference if we had tax exempt status. We are not affiliated with any school or organization, so we can not provide that. I know we can register a non-profit, apply for the tax exempt status, etc - but it takes time and effort. Someone also mentioned to me that one could use one of "fiscal sponsorship" programs such as this one:

http://www.fjc.org/fiscal-sponsorship-program

where an umbrella organization that already has tax exempt status creates an account for you in exchange for 6% cut.

Has anyone any experience with this kind of programs? If not, how is your team dealing with tax exempt status problem? (Obviously, for teams affiliated with schools it is not a problem, but for everyone else...)

Hi,

Our team got affiliated with Yellowstone Robotics out of Washington state. They have 501.3(c) status and openly allow other FTC teams to process tax deductible donations through them. We have done this all season, and it works very well.

Contact Bruce Reynolds at [email protected] for details. Mention you heard about it from The Lazybotts :-)

- Lazybotts
#nosecrets

[RoyM]

Our team (9915) is from Washington State, and our state FIRST organization (at firstwa.org) has tax exempt status, and can "host" team's accounts. So tax-exempt donations can be made to Firstwa, earmarked for a specific team. Then the team can use the funds for appropriate expenses, submitting receipts to Firstwa for reimbursement. I wonder if some other "affiliate partners" can do this for teams, too?
--Roy

[FTC4634]

Our team utilized the $5,000 minimum threshold under the IRS for 501c3 status. When income is below $5,000 (3 year average), you may be considered to conform to 501c3 without filing the application. You still have to meet the other IRS requirements for non-profit use etc, then incorporate in your state. In our state, we could incoprorate as a non-profit. Then we got a federal tax ID and W-9 which is provided to sponsors as evidence of a non-profit organization under 501c3.