We are pleased to inform you that upon review of your application for
tax exempt status we have determined that you are exempt from Federal
income tax under section 501(c)(3) of the Internal Revenue Code.
Contributions to you are deductible under section 170 of the Code.
You are also qualified to receive tax deductible bequests, devises,
transfers or gifts under section 2055, 2106, or 2522 of the Code.
Because this letter could help resolve any questions regarding your
exempt status, you should keep it in your permanent records.
Organizations exempt under section 501(c)(3) of the Code are further
classified as either public charities or private foundations. We
determined that you are a public charity under the Code section(s)
listed in the heading of this letter.
Please see enclosed Publication 4221-PC, Compliance Guide for
501(c)(3) Public Charities, for some helpful information about your
responsibilities as an exempt organization.
Director, Exempt Organizations Ruling and Agreements
Public Charity Status: 509(a)(2)
Form 990 Required: Yes
Effective Date of Exemption: June 17, 2009
Contribution Deductibility: Yes
This is great news! Relatively quick success on our initial
application without challenge! This is a great accomplishment to
round out our first year of formation! We should advertise this
achievement on the website and begin to take advantage of this new
First, your individual monthly membership 'dues' are now tax
deductible, if you itemize on your federal return. This lessens the
burden of participation a bit and we can promote this discount to new
members who balk at the cost. It appears our exemption is back-dated
to June 17, 2009 so all contributions in the 2010 tax year (and
retroactive into the 2009 tax year) are eligible. Notice to our new
officers, with this new status, we will now have formal organizational
record keeping and filing obligations with legal consequences. This
is the price of success. It should not be a burdensome practical
concern if we stay on top of things. I will help.
Second, we now have an official status to consider to solicit
contributions from charitable sources in the general community beyond
our specific membership. I will be glad to lead a committee that
wants to begin to pursue these possibilities. Briefly, these could
include financial grants and charitable gifts. This is the formal
mechanism that will enable us to begin to pursue getting serious shop
equipment that will take our group to the next level. For instance, I
will propose at the next business meeting we begin to advertise for
equipment donations (Craig's list, Cinti Enquirer classified, or
such). We can get our message out to see what is in the market and
begin to be selective on what we choose to accept. Our status allows
such gifts to be tax deductible to the givers. Again, there are
formal organizational record keeping and filing obligations with legal
consequences so there is a new responsibility to do this right.
Finally, this new official status will change our thinking a bit. We
have been an informal group with lots of non-confirmist tendencies
that can get turned-off by all the legalese. We will keep some of
that, and maintain a balance between those who want to handle the
details and those that do not as we get bigger. A useful comparison
(with similarities and differences) are the public radio stations like
91.7 WVXU http://www.wvxu.org/about/ that are also 510(c)(3). This is
not to say we will have obnoxious radio pledge drives. Like us, these
radio stations have creative types and business types that coexist to
keep things running. Did anyone see the movie 'Pirate Radio'
http://en.wikipedia.org/wiki/The_Boat_That_Rocked? Further, terms
like 'dues' now become 'membership contributions' and we might choose
to define additional levels of membership support. We can begin a
formal mechanism to accept equipment donations (like radio stations
accept used cars) that we can either keep-to-use or churn-into-cash to
apply towards projects and/or bigger/better equipment acquisitions.
We are no longer limited by the cash in our own back pockets, we have
new leverage to tap the additional resources of others who will have
an incentive to support us.