Form a Club or non-profit org.

[panama]

We have started a crawling track. we are working with the county here and some property at their ball park rec center..
advice needed to mover forward as a club or non-profit. a member brought up going to the hardware stores and asking for donations to help us build things we need and tractor work. but these folks would need a tax number to use as a write-off.
Iv joined ROAR and have their $1mill. liability policy with the county as an additional insured. that was the county's rule. wrote a contract and lease to get the property leased to us from the county board of commissioners. trying hard to bring this hobby to the front line here. This is going too happen soon. we have been 2 years in the building and growing stages. we have around 15 people attend our once a month meet and comp. growing more lately since the word is getting out and people see us since all the ball games and soccer that happens here. right up in the middle of them.
Our track and trail and small rock race course , i believe , is the biggest in the south east and way more room to grow.
Any pointers or advice as direction would be much appreciated.
FB page Panamacity Monster R-C

 

[svt923]

I don't deal with non-profits much anymore but I think that is the route you should look into. First, do you have to be a member of the club to use the RC area or is it open to the general public? This is going to affect whether you would have to apply to be a 501(C)(3) or a 501(C)(7) organization. Social and recreation clubs for members only are 501(C)(7) organizations, donations to these types of organizations are not tax deductible. To file as a 501(C)(3) organization, you would have to craft the mission of the organization to state you are providing a benefit to the public. Donations to these types of organizations are tax deductible and many states also give 501(C)(3) organizations an exemption on paying sales tax.

So the down side will be the cost, you have to pay to incorporate with your state and file with the IRS for a tax exemption. There is also the ongoing cost of filing annual reports with the state and preparing a Form 990 to file with the IRS, this can be several hundred dollars per year to pay a CPA to do unless a member of the organization can handle it.

You will have to do some cost/benefit considerations to get to your decision but incorporating is probably a good move either way. It helps further distance you from liability associated with operating the facilities.

Good luck with the club. "thumbsup"