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. 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" 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? 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 Date: Thu, 7 Jan 1999 09:54:23 -0500 >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 ============================================================