[Sca-cooks] Car washes and 501(c)(3)

[Ruth Frey]

> It's more likely the carwash is against tradition ("it's mundane") 
> ratherthan being against the law.
>  Bear wrote: 
> 501.C.3 is more about how you may use your income than how you 
> make it.  

     Actually, no, there are restrictions on making money for 501(c)(3)
organizations -- in order for it to remain non-Federally-taxed "exempt"
income, the income must be made in some way that directly relates to your
stated non-profit purpose (e.g. historical education).  A flat out
carwash doesn't cut it as "historical," and wouldn't qualify as exempt 
income.  The US gov't is also rather tricky in some of their definitions of
what is taxable and not -- for example, advertising space sold in a
periodical, even if the actual content of the periodical counted as fully
"historical," would be non-exempt and taxable.  Ditto rental of group 
equipment to others (renting archery targets to a local hunting club, etc.).

      What happens with non-exempt income is that it's treated as being made
by a for-profit sub-office (or whatever) of a non-profit overall group, and
all funds made in such a manner are then subject to standard Federal
corporate taxes -- so you *could* do it, but the bookkeeping would be a
nightmare.

      There is a small concession in that you can make some relatively
insignificant portion of your group's yearly income in non-exempt ways,
and still not have to pay taxes on it, but it has to be a pretty small
quantity.

       I know whereof I speak, having been involved in the ground-floor-
up organization of a nonprofit 501(c)(3) historical educational corporation
recently . . . It's actually been a bit of a headache, trying to figure out
what is an "acceptable" fundraiser.  There has been some discussion of
"piggybacking" historical/mundane activities, like doing a carwash in garb,
and handing out educational flyers about the garb to patrons as they wait, 
though nobody's yet called the IRS nonprofit hotline to ask about it for
sure.

       One nice thing about being a 501(c)(3) group is that you can put out
a donations can ("Please help us keep educating about history."), and it's
totally legal, and the income is non-taxable.  Doesn't always net much cash, 
but it's a very low-overhead thing to have out at demos, and every little
bit helps . . .

> Individuals can act seperately or as a group to raise money for 
> charity and donate that money as they choose.  As long as it is not organized by
> officers of the SCA acting on behalf of the SCA and the fundraiser 
> is not
> officially recognized or sanctioned by any SCA group, the fund 
> raiser is not
> an activity of the SCA.  State laws may apply, but they do not 
> apply to the
> SCA only to the individuals involved.

     I've been trying to encourage the above sorts of things a lot myself;
as an added benefit, several states allow individuals one or a couple 
"freebies" a year (you usually get X number of selling events that are not
subject to state sales tax -- though if you go over that many events, then
sales tax does apply).  Check *your* state's rules on that first, though.

      Getting back to food content, there's always the option of a Period
bake sale (Period goodies, sellers in garb, totally historical-educational)
. . .  :)

                -- Ruth