501c3

[Bob Johnson]

I am not sure what kind of expertise or legal counsel NEFA has, but I am wondering if we can find out more about NEFA acting as a fiscal agent for local DG clubs. I know it is possible, but I don't know anything about the legal/fiscal responsibilities that would entail for NEFA as an organization. Would it add too much of a strain administratively etc etc.

Is anyone out there in the non-profit sector and have some experience with this.

The gist of the arrangement is that it allows local or member clubs to piggy back on NEFA's 501c3 status and thusly making contributions to the local club tax deductible for the giver. I don't think it is a big deal for smaller day to day stuff, but could be a big deal for projects like new baskets, tee boxes, back 9's, signage, etc. The possible admin hassle is that the money does have to run through NEFA I believe and then back to the member club. NEFA may or may not take a cut for admin purposes.

Could this be brought up at the next NEFA BOD meeting?

Seems like this could really help out the local organizations if this could be arranged.

[Kenji Cline]

DisCap 501(3)(c) is a club on a smaller scale to nefa. But we do the same thing for our courses. We collect donations that are tax exempt and if the donator wants it to go to a particular course we just make sure the amount is earmarked for that course. I presume nefa could do the same thing it just takes a little accounting. Whether they want to or not is up to the BOD. As I could see it being much more of a chore on an entire NE scale. Donations could come to nefa and nefa would have to make any purchases. It would just take more collaboration on the NEFA BOD/Local Courses part.

[Greenleaf Garrison]

Let’s start with disclaimers. I do not provide legal or tax advice.

The volunteers for NEFA work hard at what they do, I am not calling anyone out here.

I have experience in running both Public and Non-Public Charities. However, I am sure there are many who know much more than I do when it comes to this topic.

Currently, the Massachusetts Corporations Division database and the Massachusetts Office of the Attorney General, public charity database, list NEFA as non-current with its filings. The MA Corp Database indicates that its status was involuntarily revoked in 2012. Last I heard NEFA BOD was trying to bring its filings up to date.

So before fiscal agency could go any further, the non-profit public charity must be current in its filings.

Every year a corporation must file with the MA Corporations Division, an Annual Report, listing officers and directors. Also, a MA Public Charity must file to the MA Attorney General the applicable 990 and the form PC. Depending upon gross receipts a form of the 990 (990n, 990ez, etc..) is required to be filed with the IRS.

The Cape Cod Disc Golf Club requested NEFA to act as fiscal agent for two donations we received in 2012. (2 palates of pavers and a number of trees) This didn't happen. I am just assuming this is because the filings were not current. Water under the bridge.

As I understand the process for fiscal agency, the receipt of the donation and the gift to another entity/non-public charity must be identified on both the 990 and the form PC. The donee (NEFA) would provide the donor a copy of the organizations 501c3 certificate for year-end deductions. This is not a big deal.

I think Bob and the Keene Disc Golf Club should get a straight answer on this one. Is there an update on the NEFA filings that members of the BOD can share?

[Bob Johnson]

Update and follow-up.
So when this thread did not really get much attention I decided to contact the NH sate rep to NEFA. Chris got back to me very quickly has said that he will share the proposal to the rest of the board. We will see what happens from there. From the few people that I have talked to, it sounds like there are people out there who would help to implement this. Although like many things implementation is easy…maintaining is another.


Bob

[Thomas Bentley]

Thank you Bob and others for bringing up this idea. I am doing some research on this over the next few weeks so the BOD has something to review. If anyone has any experience or info about this arrangement please post or PM me.

[Thomas Bentley]

Sorry for the wait. Learning about about fiscal sponsorship and trying to figure out how it would fit for NEFA and local clubs as been a longer process than I anticipated. I did a lot of reading, met with a lawyer, and presented my findings to the BOD during our June meeting. Quick should out to Daniel Treger, Attorney at Law, for his help. He is a good guy and an friend of frisbee so if you are in the market for counsel, hit him up at dtreger@phillips-angley.com.

So far as I can tell, the way we would naturally use the shelter of fiscal sponsorship to support local course development would be illegal. If a donor comes to a local club with gift for a specific project and that club does not have tax deductible status, it cannot direct the gift to NEFA and then back to the course. The government calls this a pass through. It is sort of like laundering almost. So, there needs to be a lot of infrastructure in place. There would need to be MOUs, a grant process, a grant fulfillment reports, fillings etc. Not only would that be a tough ask of the all volunteer NEFA board, the clubs would loose some autonomy and have a headache of paperwork on their hands as well. There might be a point where all of that is worth it for both NEFA and the club because the good news is that acting as a fiscal sponsor for course development is certainly in line with NEFA's mission statement. The question then becomes what dollar amount is all of this worth it for the club, the donor and NEFA? I personally would peg that number over $5,000.

Another potentially better options for a lot of clubs would be to seek sponsorship from the land owning municipality. That might work similarly to when someone donates a new backstop to the baseball field.

I think long term this should be could be a goal of NEFA especially if NEFA ends up with a full time executive director. But then again there would be a burden on the clubs of being an affiliate of NEFA ...

Here are some links that I used in my research. I'd love to hear other's thoughts. I think that this is a discussion we should continue to revisit as NEFA grows and the potential for large dollar donations direct towards disc golf also grows.

http://www.councilofnonprofits.org/fiscal-sponsorship

http://www.councilofnonprofits.org/site ... 9.2009.pdf

http://www.nonprofitlawblog.com/fiscal- ... -it-wrong/

http://www.fiscalsponsorship.com/images ... Colvin.pdf

http://www.fiscalsponsorship.com/

http://charitylawyerblog.com/2010/09/17 ... al-agency/

NEFA is listed as a current 501 c 3 with an EIN #:
http://apps.irs.gov/app/eos/pub78Search ... ame=Search

Key Systems to Look for in a Sponsor
• Accounting expertise and systems for tracking
and reporting on funds
• Grant management (pre-award, post-award)
• Strong human resources department with
compliance, benefits, policies, employee relations
• Insurance and risk management, contracting,
legal agreements
• Highly organized systems in place


What Do Sponsors Need in Place
• Staff and board capacity to administer
services to programs
• Back-up systems for all key tasks
• Should be customer service oriented
• Strong backbone and infrastructure
• Understanding of your costs to price services
appropriately

Keys to a Successful Relationships
• Mission compatibility
• Trust
• Clarity about services, time frame
• Fiscal sponsor has required capabilities
• Mutual commitment to communication

[Greenleaf Garrison]

Thomas,
This is very good information. Thank you for doing all the research and meeting with the attorney.