Non-Profit Club Lax? Filing for 501(c)3 Status

[Hunt]

Our team is currently looking at filing for non-profit status, which would allow us some benefits regarding raising money for our club. At this point we are very new to the idea and even though we have done the preliminary research, would love insight into the process.

Has anyone out there - other clubs and teams in the MCLA especially - filed for 501(c)3 not-for-profit status before? I would love to hear what your experience was like and what you think about filing for such a distinction.

From what I can tell it's definitely a lengthy application procedure. And I have found that there is a fee of $500 in addition to tons of paperwork, documents, and a 4-6 month waiting period. By anyone else's experience are these the biggest constraints?

Any and all insight is welcomed and encouraged.

[Danny Hogan]

before you do, check to see if your rec sports department doesn't already have some access to a 501(c)3 account. @ UF we did and people would just cut their checks to "UF Foundation - Men's Lacrosse"

[Karl Lynch]

I agree with Danny. We asked about it and the people above rec sports were more than happy to set us up with their existing non-profit status. We now have an account that is budget proof that gives our donors a tax break.

[Has No Left]

I would tell you that it can be done - but as a player entering your senior year of eligibility, I would very much discourage you. This is really an activity that should be a focus of your alumni, not the current team leadership.

Your "Articles of Incorporation" alone will take several weeks and probably eat up most of your budget if you can't get it done pro bono from an alumni - preferably a tax attorney. If it's not done properly, your 501 status wouldn't get approved and you would have wasted allot of time.

You have to have a Board, someone to file your taxes annually and if it takes off, you'll need Director and Officer Liability Insurance.

If I were you, I would send the time identifying alumni who would be willing to set up the 501 and manage it, rather then trying to set it up as a team leadership.

[mnref]

I am no lawyer but went through this with the Minnesota Chapter of US Lacrosse and have helped some of our local high schools go through the process.

The process of forming a non-profit corporation and obtaining 501c3 status are linked but you can do the first without the second.

Forming a non-profit corporation is done at the state level and is generally pretty easy (at least it has been the couple of times I've done it here in Minnesota). There are plenty of templates for bylaws/articles of incorporation that you can complete essentially by filling in some blanks and perhaps making a few modifications. Here is one example http://users.aristotle.net/~nonprofit/startup/bylaws.htm

Be aware that the IRS does have some requirements that must be in your bylaws before your corporation can get 501c3 status so make sure that language is included if you think you might want to apply to the IRS.

Here is nice summary of the process that even links to individual state requirements http://www.hurwitassociates.com/l_start_forming.html (No I don't endorse the firm but I thought their site was easy to follow)

I suppose I better reiterate that I am not a lawyer so this is not professional advice.

Matt

[Ken Lovic]

As a Sports Club Director (SCC) i highly recommend speaking to your SCC. Most campuses have a relationship with their fundraising people (called different names on campuses). But as Danny said, most of them will set up a sub set category for your individual club. Here at Tech I have 12 clubs that have a foundation account through our GTF. They have their own balance etc... and get to use the GT non-profit status.

Secondly- be very careful when you go and name your organization if you decide to pursue on your own. remember- the school name belongs to the school, not to you. You can not legally call the new 501-3c "State U" Lacrosse Fund or something like that.

But go to people on campus first, they are some great outlets. If your SCC is not willing to help contact the fundraising/capital people on campus. Not ATHLETICS but University people.

[LaxTV_Admin]

Thanks for the information guys. You may have saved us a lot of time and money

[Dulax31]

We currently have our 501(C)3 non-profit status for our club at UMD and while it has it does require a little work to stay in compliance, it is nice to have control of your funds. Also we were able to do our banking through Wells Fargo, and not the school bank which is much better. Having a checkcard is very handy in reserving rooms / paying for things, plus being able to deposit checks all over the place is great! Any money the school gives us is just make out to our club name.

At first I regretted the decision to start the 501(C)3 process, but now that we have it, things are much easier for the programs funds.

[Zeuslax]

This is good advice. It's interesting to see how different institutions are, even amongst state schools. The each have varying policies, procedures and opinions on the handling of money by club sports. At Ferris State they urged us to take our money off campus. They saw that our needs were very different than all of the other clubs and realized that their infrastructure wasn't in place to handle our finances. Their structure was also very different and they were willing to work with us in many fashions to make our lives easier. We eventually had two accounts, but could move money easily. Ferris also had a direct relationship with a regional bank. The bank and university handled all of our paper work along with the necessary leg work. (On a side note stuff like this reminds me of the incredible relationship we had with the university there) However, at CMU creating a non-profit and a separate account (taking money off campus away from their oversight) was out of the question. This wasn't a bad thing though. They already had good procedures in place. We have tax deductible options, a credit card and very quick access to our resources. The activities finance director's duties include our type of needs in his job description. He absolutely loves working with us (coaches/adults and not students) and our structure and organization. His accessibility is great and we have a solid relationship. We have one or two hurdles sometimes, but the system is stress free and very user friendly.