So what is 501c3 anyway?
It indicates that the organization or corporation is tax-exempt.
What does that mean?
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.
Give me the short answer!
Donations made to the Los Angeles Racing Dragons Foundation can be tax deductible (please discuss this with your tax preparer to determine if it applies to you).
June 21, 2000
"We'll talk about filing for 501c3 status at practice and see who can help preparing that package." -Leon
We spent almost two years gathering together materials and filling out documentation to become a non-profit organization. None of us had any experience with the size and complexity of the documentation required to become a non-profit organization and it took several committees to determine what was needed to make this all happen.
We applied for our non-profit status on Nov 27, 2002 and while many may look at this as a financial restructuring -- which it was -- its impact was actually more dramatic structurally.
When we all decided that this was the direction we wanted to go, we needed to vote in a board of directors, take minutes, have agendas and structure. While we had meetings before, the new procedures that were put into place to ensure compliance forever changed the face of the team from one of a group of friends into an actual corporation where we discussed the team as an entity itself, which it now was legally.
The first board of directors were Leon Cheng, Wileen Wong, Kenny Kim, Laura Messerschmitt.
While there were many individuals who toiled quietly to make this happen, we owe a lot to the generous assistance of the Bay Area Dragons who guided us through this transition. It was also necessitated the renaming of the team to the more officious, Los Angeles Racing Dragons Foundation (personally, I still prefer teamLARD).
-Kenny's Reflections 2010
It has just been brought to my attention; the Los Angeles Racing Dragons are now a non-profit organization! Our 501c3 application has been approved by the IRS! This has been an almost three-year endeavor and has required the hard work (understatement) of several people. I would like to recognize them:
As your fellow team members, Diane and Wileen have contributed incredible and incomparable amounts of time, energy, and dedication; without either of their help, the team would be in the exact same position three year’s ago when we discussed, as officers, that non-profit is something we would like to pursue. Other indispensable help with the application process and additional input came from Kenny K, Laura, Scott, Vi, and Lisa (if I am missing anyone, apologies).
Finally, a huge debt and all our gratitude goes out to Brett Byers, who has taken on the task of legal guide and consul, pro bono. He has taken us step by step through the entire process; all while being based in San Francisco.
This represents some changes in our team structure and organization, as you can tell starting from the contents of the website. But keep in mind that the core values and foundation of our team are entirely intact – that we paddle for fun and for each other, meeting new friends, and competing. The team was founded as a family and will always remain so.
The next step is to complete our sponsorship package. Discussions at the next officer’s meeting will include this package and also distribution of responsibilities that have been added from this approval (to offload an excessive workload on both Diane and Wileen). For team members, start thinking about who we may approach for future sponsorship! With the 501c3 approval, all contributions to the team are now tax deductible!
Thanks, and welcome to a new chapter for teamLARD!