DISCLAIMER: These posts contain hints, tips and ideas from folks that have had some experiences dealing with this. It is NOT meant to be legal advice here - just related experiences. Please consult with a reputable professional if necessary. Date: Sat, 28 Nov 1998 08:23:19 -0700 From: Jim Blay and Monica Vasey To: ernet Subject: EQ-ResQ: Thanks for advice, now more questions I want to give a heartfelt thanks to all who provided so much great information. As a reminder, I was trying to decide about becoming a non-profit or remaining as I am, with all expenses coming out of my own pocket. After thinking about it for a few weeks, and discussing the idea with horsey friends, I've decided that it would be best to get everything organized, get a laywer, and go ahead and file. I'm going to retire from the US Air Force soon, and my income will drop drastically. With my health problems, I'm unable to get a second job just yet. Our plans are behind in trying to get up an entire perimeter fence, and various shelters and sheds before winter. We'll need to change some plans to make the rescue equine area seperate from our own horses' area. I'll redo plans this winter, get a business plan typed in, search for individuals willing to serve on the board, etc. Miscellaneous questions I have: I'm currently using both of my mares as foster mom's for my foals. Will I need to stop using them in order to keep my horses "seperate" from the rescue? Foals need some adult supervision. What questions should I ask prospective board members to ensure I choose people who will carry out my ideas and not "take over" the rescue to change to their agendas? Will I need to have the board members sign a contract? Will I need board members to be in the same state as my rescue? Can non horse related donated items be sold and the cash put into the rescue account? Thanks for your assistance and patience. Monica Vasey in New Mexico Rancho del Lobo Loco, equine rescue, gentling, overnight accomodations. ============================================================ From: slyshot@mindspring.com To: , "Jim Blay and Monica Vasey" Subject: Re: EQ-ResQ: More questions answered Date: Sat, 28 Nov 1998 18:58:33 -0500 > Miscellaneous questions I have: >I'm currently using both of my mares as foster mom's for my foals. Will >I need to stop using them in order to keep my horses "seperate" from >the rescue? Foals need some adult supervision. I'm thinking that by the time you're officially organized the foals will not need foster moms any longer and so it may be a moot point. I don't think you'll have to keep them separate as such. We have one horse who isn't a rescue but is used in our programs. Its more important for there to be a paper trail showing that money donated to the rescue is NOT being used to support non-rescue horses. >What questions should I ask prospective board members to ensure I choose people who will carry out my ideas and not "take over" the rescue to change to their agendas? >Will I need to have the board members sign a contract? Our board members currently serve as auxiliary members for several months (we have monthly meetings) before they are voted in as full members. This allows us to weed out people who show up once in a great while, or are troublemakers, or have a totally different agenda. We also have a full page statement, in explicit terms, of what we expect from our board members. If someone was feeling wishy-washy about the commitment we require of a board member this statement would push them over the edge, one way or the other. We also have one advisory board member. This is someone who is very connected to us, but whose ideas on some main issues vary considerably from the DEF "line". We don't want her as a voting member; she doesn't really want to be a voting member, but we want her valuable input and she is willing to give it. Our board members don't have contracts. >Will I need board members to be in the same state as my rescue? Won't it be difficult for them to attend board meetings if they're in a different state? Absentee members, or members who are only members because it looks good on their resume, aren't worth your time, nor are they very interested in your venture. >Can non horse related donated items be sold and the cash put into the rescue account? Yes, yes, yes! People donate non-horse stuff to us all the time: a pile of men's Armani suits, used cars (I'm driving one of them), exercise equipment, a house, yard sale-type stuff. If they give it to the rescue, the rescue is free to sell it and use the funds as it determines best for the welfare of the horses. Klondike (Cris May) Days End Farm Horse Rescue (MD) http://www.geocities.com/Heartland/6768 ============================================================ From: Nonetfarm@aol.com Date: Sat, 28 Nov 1998 22:20:46 EST To: equinerescue@MyList.net, slyshot@mindspring.com Subject: Re: EQ-ResQ: More questions answered In a message dated 11/28/98 6:04:54 PM Central Standard Time, slyshot@mindspring.com writes: << >Will I need board members to be in the same state as my rescue? Won't it be difficult for them to attend board meetings if they're in a different state? Absentee members, or members who are only members because it looks good on their resume, aren't worth your time, nor are they very interested in your venture. >> Is there any legal reason that you can't have board meetings in cyberspace/ (Sorry, lost my question mark!) Susan, TX ============================================================ From: slyshot@mindspring.com To: , Subject: Re: EQ-ResQ: Cyber Board Mtgs. Date: Sat, 28 Nov 1998 22:54:38 -0500 >Is there any legal reason that you can't have board meetings in cyberspace/ I can't think of a legal reason not to. But cyberspace isn't secure and you might not want some unknown lurking on your board meetings. I'm also having trouble envisioning some of our livelier meetings taking place on the web, simply because of the delay in response time, but maybe ICQ would handle this? I don't ICQ so I don't know. I can see some advantages to it. Klondike (Cris May) Days End Farm Horse Rescue (MD) http://www.geocities.com/Heartland/6768 ============================================================ Date: Sat, 28 Nov 1998 23:07:02 -0700 To: equinerescue@MyList.net, slyshot@mindspring.com From: Pat Calloway Subject: Re: EQ-ResQ: Cyber Board Mtgs. At 10:54 PM 11/28/98 -0500, slyshot@mindspring.com wrote: >>Is there any legal reason that you can't have board meetings in cyberspace/ > > >I can't think of a legal reason not to. But cyberspace isn't secure and you >might not want some unknown lurking on your board meetings. I'm also having >trouble envisioning some of our livelier meetings taking place on the web, >simply because of the delay in response time, but maybe ICQ would handle >this? I don't ICQ so I don't know. I can see some advantages to it. > You can also arrange for conference calls via the telephone or meet somewhere that's convenient for all Board Members (think someplace like Las Vegas where it's cheap to fly and you have something for the SOs to do). The problem would probably be them getting away if they are pretty much the primary caretaker for their critters. I believe that you do have to have at least one annual meeting to fulfill requirements of a non-profit/corporation. Pat Calloway, Equine Rescue/Creatures Listowner epona@concentric.net (AZ) http://pages.prodigy.com/equinerescue/home.htm http://pages.prodigy.com/equinerescue/creature.htm ============================================================ From: "May, Cris" To: "'equinerescue@mylist.net'" Subject: EQ-ResQ: Board Job Description-Long Date: Tue, 1 Dec 1998 15:27:47 -0500 As requested, following is the job description Days End uses for auxiliary (and regular) board members. Feel free to use this as a guideline in developing a job description for your own boards. Klondike (Cris May) Days End Farm Horse Rescue .......................... Days End Farm Horse Rescue Job Description - Auxiliary Board Member Purpose of the Auxiliary Board: To supplement and complement the Executive Board through personal contacts or personal knowledge and to act as a drawing pool for enlargement of the Executive Board should a position become available. Auxiliary Board Members have no fiduciary responsibility nor voting power but act as an information network to aid in the betterment of DEFHR thereby helping to ensure quality care and treatment of horses. The Auxiliary Board Responsibilities: The DEFHR Auxiliary Board is responsible as a corporate entity to: Help secure funding to insure the financial solvency of DEFHR Help to monitor finances and offer suggestions on fiscal responsibilities Help to create and update a long range plan for the organization Advance the institution through the accomplishment of board determined tasks To help determine the means of accomplishing the goals of DEFHR To propagate the mission of DEFHR through personal and professional contacts. Individual Auxiliary Board Member Duties: Board Meetings: During the course of a normal fiscal year the Executive Board meets for twelve regularly scheduled meetings. Each Auxiliary Board Member is expected to attend and participate in the executive board meetings. Notification of the meetings will be mailed at least two weeks in advance along with the topics to be discussed. All Board meetings are scheduled at 7:30 p.m. on the 4th Monday of every month at DEFHR. Should there be a change you will be notified in advance. Committee Meetings: There are four standing committees of the board and supplemental committees appointed as needed. Standing committees include executive committee, finance committee, development committee, and center operations committee. Each Auxiliary Board Member is encouraged to serve a minimum of one committee for the purpose of actively participating in the fulfillment of the institution's mission statement. Personal Giving: It is board policy that each Auxiliary Board Member contribute to the organization annually to the best of their ability. Philanthropic giving does not include gifts in which any goods or services were received by the Auxiliary Board Member. Solicitation: Development is the lifeblood of the organization. The board as a whole and individual members and advisors must assume leadership roles in soliciting gifts by bringing their personal networks to bear in the accomplishment of this objective. Special Events: Each Auxiliary Board Member is expected to actively participate in the promotion and coordination of a DEFHR event that falls within their expertise. Ethics: Auxiliary Board Members at all times will act in a manner that reflects favorably on the organization. Auxiliary Board Members must recuse themselves from involvement in any activity that might be a conflict of interest and put the success of DEFHR before their personal gain. Signature: As an Auxiliary Board Member of DEFHR, I pledge to uphold the aforementioned directives to the best of my ability and actively participate in the fulfillment of DEFHR's mission statement. Name: Signature: Date: Board President Signature: Date: Days End Farm Horse Rescue Copyright 1998 (C) All Rights Reserved ============================================================ From: Janis.Comstock-Jones@ecr.net To: equinerescue@MyList.net Date: 15 Dec 1998 10:05:40 EDT Subject: EQ-ResQ: Non-Profit Status: States, Chapters Since a lot of you are in the process of the applications and have apparently caught the attention of some of the newcomers since the class, I was wondering if we might have some comments on a couple of things I asked during the online class but did not see replies to, at that time. I'm not really looking for technical details, how-to, but what happened in your own situations. First, for anyone who is interested in attaining non-profit status for their group, maybe some of you "pros" could address the relationship to being registered with your state and attaining the IRS 501(c)3 status, as well as incorporated vs. not incorporated. I realize this varies from state to state, but I think it would be interesting to read your own experiences aside from the state regulations. Maybe you could address, also, how your group's advisors and directors came to the decisions to do what it did. Second, are any of your groups chapters of a national organization that is non-profit? If so, how does the chapter:national relationship work out with your federal and state status? What did you have to do, and what was covered under your national h.q.? If there isn't a rescue on the list that falls under this topic, but someone has the same sort of experience in a different non-profit, that would also be interesting. In my own experience as sec/treas of state chapters, the chapters reported to the national office, and the national office handled reports to both the state and federal level. Those were small state chapters, though. In working for large non-profits, I've seen the accounting and fund-raising departments have to grind out all kinds of reports, so I'm not sure how much of that was related to the non-profit status and how much was for various other types of audits. Janis ============================================================ Date: Wed, 6 Jan 1999 08:51:09 -0500 From: J&L <73164.1052@compuserve.com> Subject: EQ-ResQ: non-profit status To: Pat/list From what I gathered from the discussion on non-profits, you can't have a boarding business and a rescue operation in the same place and get non-profit status for the rescue. Did I interpret this correctly? If so, what do those who take in boarders tosupport the rescued horses do regarding incorporating and taxes? Any ideas/suggestions?? Lynn...Laurel Springs ============================================================ Date: Wed, 06 Jan 1999 10:11:56 -0700 To: equinerescue@MyList.net From: Pat Calloway Subject: Re: EQ-ResQ: non-profit status At 08:51 AM 1/6/99 -0500, J&L wrote: >>From what I gathered from the discussion on non-profits, you can't have a >boarding business and a rescue operation in the same place and get >non-profit status for the rescue. Did I interpret this correctly? If so, >what do those who take in boarders tosupport the rescued horses do >regarding incorporating and taxes? Any ideas/suggestions?? >Lynn...Laurel Springs I don't think that is correct. The consensus of the list (and you better ask a tax/non-profit professional to be *really* sure! ) was that you could have a business and a non-profit on the same property, but the main thing was to keep accounts/books *totally* separate and squeaky clean to avoid any potential problems with the IRS, etc. Most of the non-profit discussion is archived with the classes and past digests on the Equine Rescue Mailing List Home Page. Url in my sig file, at the bottom of individual messages and top of digests if anyone wants to go back and doublecheck. Pat Calloway, Equine Rescue/Creatures Listowner epona@concentric.net (AZ) http://pages.prodigy.com/equinerescue/home.htm http://pages.prodigy.com/equinerescue/creature.htm ============================================================ From: "May, Cris" To: "'equinerescue@MyList.net'" Subject: RE: EQ-ResQ: non-profit status Date: Wed, 6 Jan 1999 12:38:37 -0500 >but the main thing was to keep accounts/books *totally* separate and squeaky clean to avoid any potential problems with the IRS, etc. Yes, it is my understanding as well that you must keep impeccable records of both operations. I don't recall anyone saying you couldn't do it. Klondike (Cris May) Days End Farm Horse Rescue (MD) http://www.geocities.com/Heartland/6768 ============================================================ Date: Wed, 06 Jan 1999 13:17:33 -1000 From: "Michael G. Barraque" X-Mailer: Mozilla 4.06 [en] (Win95; I) MIME-Version: 1.0 To: equinerescue@MyList.net, HVIDEO885@aol.com > If you take in the boarders to support rescue, then wouldn't it be part of the > rescue and all funds be part of the rescue? I am glad this question was ask > as I had planned on taking in boarders to help support mine. For awhile we leased a large barn with the idea of taking in borders to help pay the rent and hopefully help support our rescue organization. We were told there is no reason a non-profit business could not conduct such an operation much like any other for-profit business would. The big difference being that no member, board member, etc is allowed to profit from the operation. Seems many people (ourselves included) have the notion that a non-profit cannot make money. This is not true. A non-profit is a business and thus must generate income in order to survive. There was a great couple of retired guys here that gave seminars on being what they called a "Philanthropreneur". It was really great and dispelled many of the myths about what a non-profit group can and cannot do. They also some very unique and interesting ideas regarding fundraising. They were putting out an email newsletter but have not been doing so lately. If anyone would like more info or copies of the newsletters I have on file please let me know. Sorry this got a little long and drawn out. -- Michael G. Barraque Rainbow's End H.O.R.S.E. Maui, Hawaii http://www.maui.net/~nahiku/horses ============================================================ From: "May, Cris" To: "'equinerescue@MyList.net'" , "'HVIDEO885@aol.com'" Subject: RE: EQ-ResQ: non-profit status >If you take in the boarders to support rescue, then wouldn't it be part of the rescue and all funds be part of the rescue? > No. Any profit made from the boarding operation would certainly be part of the rescue. The problem comes with perception, either the IRS's or the public's. If the rescue is receiving donations of money, tack, feed, etc. you must keep scrupulous records that those donations were used to benefit the rescue horses, NOT the boarded horses. If someone gives a truckload of hay, and some of that hay is used for the boarded horses, there must be a record of the boarding operation paying the rescue operation for the hay used. Say Hanna Horseowner donates some winter blankets for the rescue horses. If you decide these blankets don't fit the rescue horses but one of your boarder's could use one, you must have a bill of sale showing that the boarder paid the rescue for the blanket. (And you can bet that Hanna H. will notice if one of "her" blankets appears on a non-rescue horse, and wonder about it, and more than likely comment on it to her friends, who will talk to their friends ... . This is part of the reason we have a used tack shop as part of our rescue - it eliminates a lot of questions.) I don't want to scare anyone off the idea of supplementing rescue income by boarding but I cannot emphasize strongly enough how careful you must be with your recordkeeping. Last year Maryland Horse Rescue was convicted of fraud, in part because of bad recordkeeping between rescue and boarded horses. (There was also major fraud by this org., frustrating for us because the public seems to think all rescues in a given state are connected, whether they are or not - another thing you must keep in mind.) Klondike (Cris May) Days End Farm Horse Rescue (MD) http://www.geocities.com/Heartland/6768 ============================================================ Date: Thu, 07 Jan 1999 08:12:33 -1000 From: "Michael G. Barraque" To: equinerescue@MyList.net Subject: Re: EQ-ResQ: non-profit status > No. Any profit made from the boarding operation would certainly > be part of the rescue. The problem comes with perception, either the > IRS's or the public's. If the rescue is receiving donations of money, > tack, feed, etc. you must keep scrupulous records that those donations > were used to benefit the rescue horses, NOT the boarded horses. In our experience, there was so little to be gained by taking in boarders that it was not worth the trouble of keeping everything at the barn and on the books seperated. The boarders did not realize or respect the need to keep things cleanly seperated. That along with some other influences caused us to give up on the boarding idea. Just passing along our experiences.... -- Michael G. Barraque Rainbow's End H.O.R.S.E. Maui, Hawaii ============================================================