The Ford Barn

Skibb · 10-10-2014, 11:27 AM

Some members of our Cub (not I) want to incorporate as a non profit entity. Currently, we are a small dual MARC/MAFCA Model A Ford Club with no history or current experiences that suggest this move. We are just a social Model A group. It's beyond my pay grade to even guess if this is sane or insane. Your experiences or comments are most welcome.

Ron/IA · 10-10-2014, 12:32 PM

Skibb - Are club did the non-profit paperwork about 5-years ago. But our club is more than just social. We have any annual swap meet, and the monies raised from it go to local college auto mechanics program, high school auto and mechanical programs, etc. Because of what we do with our treasury dollars, it saved us from having to pay taxes.

A local sportsman's club I belong too did the same. It sponsors high school trap shooting, hunter safety education, and bow hunter safety education through the dollars raised from shooters using the various shooting ranges. Again, this was an advantage to club financially.

We found non-profit was of benefit to us, but I can not tell you it would be so in your case.

Has this been reviewed by an attorney? Also, you can GOOGLE "non-profit", and get information from the "GOV" websites.

You need to have someone knowledgeable in non-profits to do an evaluation of you club's finances. By the way, this is a costly (attorney fees, etc.) endeavor unless you can do it yourself; which is not advisable.

I hope this helps.

BRENT in 10-uh-C · 10-10-2014, 03:37 PM

Quote:

Originally Posted by Skibb

Some members of our Cub (not I) want to incorporate as a non profit entity. Currently, we are a small dual MARC/MAFCA Model A Ford Club with no history or current experiences that suggest this move. We are just a social Model A group. It's beyond my pay grade to even guess if this is sane or insane. Your experiences or comments are most welcome.

May I ask "Why"?? Is it for liability reasons??

Skibb · 10-10-2014, 08:11 PM

Brent,

There are folks in the club that think it's "necessary" to protect them from liability issues. I am not amongst them; I don't mean to criticize their view. However, we have no activities or mission such as Ron's Clubs. And thank you Ron for your input!! Plus there is no history or current suggestion of problems. It will come to a vote by the membership soon.

denis4x4 · 10-10-2014, 10:25 PM

Get some advice from an attorney and/or CPA as to the pros and cons on setting up a non-profit. Requirements and protections vary from state to state. I'm president of a non-profit irrigation corporation in Colorado and we pay plenty for liability insurance. There are 17 shareholders. The advice you'll get here is worth exactly what you're paying for it!

noboD · 10-10-2014, 10:30 PM

Sponsored Links (Register now to hide all advertisements)

I fail to see how being non profit would protect you from liability. Get a D&O insurance policy.

Mike V. Florida · 10-10-2014, 10:30 PM

There are a whole bunch of non profits.

There is 501(c)(3),
501(c)(7), and others.

You need a purpose for the public good not just a group of car lovers to be a 501(c)(3). You need to keep meticulous records of what you do, when you did it and whom it helped.

Just because you become a non profit corporation does not eliminate all possibility of law suits against its officers. This is the US you can sue anyone for any reason. California sued (and won) its lawsuit against Lowes because it was advertising and selling 2x4's that were not 2" x 4".

If you are already a corporation they will go back for 3 years to determine what kind of stuff you have done before granting 501(c)(3) status.

So, in my opinion, if you are looking for suit protection, forget it. If you wish to raise funds, accept donations, sell advertising, and educate the public on the "life and times of the Model A" go for it.

BILL WILLIAMSON · 10-11-2014, 01:11 AM

Well, the Dog & I together, in the garage, are definitely a NON-PROFIT pair! You should see what we spend on PARTS, COFFEE, & expensive DOG TREATS!
Bill W.

Skibb · 10-11-2014, 07:19 AM

Great advice .... Thank you........

Dick Carne · 10-11-2014, 04:50 PM

Skibb -

I'm a "recovering lawyer" and have been for a number of years - haven't practiced full time in over 30 years now (and for professional liability purposes, my comments that follow are not intended to constitute legal advice, just "random comments" in general). I personally don't really see much of a benefit for a local club to consider incorporating as a non-profit entity, and at first blush I'm inclined to agree with Mike V. out of Florida (especially his last sentence) and noboD above (as to the liability aspects of incorporating). If (as I suspect) your club's rationale for considering such a move is for liability purposes, consider instead the purchase of a blanket liability policy. However, with that said, I'm not certain that you would find one that would be both cost-effective and yet broad enough to cover all areas of potential liability that your local club and/or its officers and members might incur from time to time. I have not reviewed either of the two national Model A national liability policies in several years, but I rather suspect that those coverages that were included several years back have either been scaled back significantly or dropped altogether. And given the tendency of insurance companies to scale back on the scope of coverages offered, my suspicion is that to find one with sufficient coverages to cover all primary instances of potential liability would be far too costly for a small local club to justify. (By the way and for the record, most of my practice years ago was in trying to keep small corporations and a few banks and credit unions in compliance with all of the federal and state regulations that seemed to never stop coming - but enough dribble.) Good luck to you and your club as you consider why you feel the need to consider this course and from there ultimately conclude your most reasonable course of action.

Dick

Skibb · 10-11-2014, 06:18 PM

Dick, thank you, as well as big thank yous to the other posters. We will have a vote in the next couple months on this idea. While, it's not my cup of tea and I can't see one reason for it, others are all hot for it.

redmodelt · 10-11-2014, 09:21 PM

Our Model T club dropped membership requirement to have to join one of the national clubs some time back. We formed a LLC and do have insurance, not sure about the non profit part.
Our clubs only income is from the Portland Swap Meet we don't do car shows or bake sales etc. We as a club do not put the swap meet on. The 5 or 6 clubs that are involved in the swap meet have it under a different Corp. or LLC and we (our club and the other clubs) receive payments like investors. Members of the clubs involved do volunteer work at the gates etc during the meet.
Being an LLC protects the members of our Model T club from being sued personally if an accident happens when on tour. We still have to have individual auto insurance which you would still have to have if under any policy from the national T or A clubs.

10-10-2014, 11:27 AM	#1
Skibb Senior Member Join Date: Dec 2011 Location: Jupiter, FL Posts: 536	Model A Club Re: Non Profit Incorporation Some members of our Cub (not I) want to incorporate as a non profit entity. Currently, we are a small dual MARC/MAFCA Model A Ford Club with no history or current experiences that suggest this move. We are just a social Model A group. It's beyond my pay grade to even guess if this is sane or insane. Your experiences or comments are most welcome.

10-10-2014, 12:32 PM	#2
Ron/IA Senior Member Join Date: May 2010 Location: Amana IA Posts: 527	Re: Model A Club Re: Non Profit Incorporation Skibb - Are club did the non-profit paperwork about 5-years ago. But our club is more than just social. We have any annual swap meet, and the monies raised from it go to local college auto mechanics program, high school auto and mechanical programs, etc. Because of what we do with our treasury dollars, it saved us from having to pay taxes. A local sportsman's club I belong too did the same. It sponsors high school trap shooting, hunter safety education, and bow hunter safety education through the dollars raised from shooters using the various shooting ranges. Again, this was an advantage to club financially. We found non-profit was of benefit to us, but I can not tell you it would be so in your case. Has this been reviewed by an attorney? Also, you can GOOGLE "non-profit", and get information from the "GOV" websites. You need to have someone knowledgeable in non-profits to do an evaluation of you club's finances. By the way, this is a costly (attorney fees, etc.) endeavor unless you can do it yourself; which is not advisable. I hope this helps. __________________ Ron/IA 1929 Fordor Steelback Hawk A Model A Ford Club http://hawkamodelaclub.org/

10-10-2014, 08:11 PM	#4
Skibb Senior Member Join Date: Dec 2011 Location: Jupiter, FL Posts: 536	Re: Model A Club Re: Non Profit Incorporation Brent, There are folks in the club that think it's "necessary" to protect them from liability issues. I am not amongst them; I don't mean to criticize their view. However, we have no activities or mission such as Ron's Clubs. And thank you Ron for your input!! Plus there is no history or current suggestion of problems. It will come to a vote by the membership soon.

10-10-2014, 10:25 PM	#5
denis4x4 Senior Member Join Date: May 2010 Location: Durango CO Posts: 1,309	Re: Model A Club Re: Non Profit Incorporation Get some advice from an attorney and/or CPA as to the pros and cons on setting up a non-profit. Requirements and protections vary from state to state. I'm president of a non-profit irrigation corporation in Colorado and we pay plenty for liability insurance. There are 17 shareholders. The advice you'll get here is worth exactly what you're paying for it! __________________ No restorable Model A's were harmed in the building of this truck!

10-10-2014, 10:30 PM	#6
noboD Senior Member Join Date: May 2010 Posts: 319	Re: Model A Club Re: Non Profit Incorporation Sponsored Links (Register now to hide all advertisements) I fail to see how being non profit would protect you from liability. Get a D&O insurance policy.

10-10-2014, 10:30 PM	#7
Mike V. Florida Senior Member Join Date: May 2010 Location: South Florida Posts: 14,054	Re: Model A Club Re: Non Profit Incorporation There are a whole bunch of non profits. There is 501(c)(3), 501(c)(7), and others. You need a purpose for the public good not just a group of car lovers to be a 501(c)(3). You need to keep meticulous records of what you do, when you did it and whom it helped. Just because you become a non profit corporation does not eliminate all possibility of law suits against its officers. This is the US you can sue anyone for any reason. California sued (and won) its lawsuit against Lowes because it was advertising and selling 2x4's that were not 2" x 4". If you are already a corporation they will go back for 3 years to determine what kind of stuff you have done before granting 501(c)(3) status. So, in my opinion, if you are looking for suit protection, forget it. If you wish to raise funds, accept donations, sell advertising, and educate the public on the "life and times of the Model A" go for it. __________________ What's right about America is that although we have a mess of problems, we have great capacity - intellect and resources - to do some thing about them. - Henry Ford II

10-11-2014, 01:11 AM	#8
BILL WILLIAMSON Senior Member Join Date: Dec 2010 Location: FRESNO, CA Posts: 12,560	Re: Model A Club Re: Non Profit Incorporation Well, the Dog & I together, in the garage, are definitely a NON-PROFIT pair! You should see what we spend on PARTS, COFFEE, & expensive DOG TREATS! Bill W. __________________ "THE ASSISTANT GURU OF STUFF"

10-11-2014, 07:19 AM	#9
Skibb Senior Member Join Date: Dec 2011 Location: Jupiter, FL Posts: 536	Re: Model A Club Re: Non Profit Incorporation Great advice .... Thank you........

10-11-2014, 04:50 PM	#10
Dick Carne Senior Member Join Date: May 2010 Location: Fayetteville, Georgia Posts: 467	Re: Model A Club Re: Non Profit Incorporation Skibb - I'm a "recovering lawyer" and have been for a number of years - haven't practiced full time in over 30 years now (and for professional liability purposes, my comments that follow are not intended to constitute legal advice, just "random comments" in general). I personally don't really see much of a benefit for a local club to consider incorporating as a non-profit entity, and at first blush I'm inclined to agree with Mike V. out of Florida (especially his last sentence) and noboD above (as to the liability aspects of incorporating). If (as I suspect) your club's rationale for considering such a move is for liability purposes, consider instead the purchase of a blanket liability policy. However, with that said, I'm not certain that you would find one that would be both cost-effective and yet broad enough to cover all areas of potential liability that your local club and/or its officers and members might incur from time to time. I have not reviewed either of the two national Model A national liability policies in several years, but I rather suspect that those coverages that were included several years back have either been scaled back significantly or dropped altogether. And given the tendency of insurance companies to scale back on the scope of coverages offered, my suspicion is that to find one with sufficient coverages to cover all primary instances of potential liability would be far too costly for a small local club to justify. (By the way and for the record, most of my practice years ago was in trying to keep small corporations and a few banks and credit unions in compliance with all of the federal and state regulations that seemed to never stop coming - but enough dribble.) Good luck to you and your club as you consider why you feel the need to consider this course and from there ultimately conclude your most reasonable course of action. Dick

10-11-2014, 06:18 PM	#11
Skibb Senior Member Join Date: Dec 2011 Location: Jupiter, FL Posts: 536	Re: Model A Club Re: Non Profit Incorporation Dick, thank you, as well as big thank yous to the other posters. We will have a vote in the next couple months on this idea. While, it's not my cup of tea and I can't see one reason for it, others are all hot for it.

10-11-2014, 09:21 PM	#12
redmodelt Senior Member Join Date: May 2010 Location: Portland OR Posts: 6,340	Re: Model A Club Re: Non Profit Incorporation Our Model T club dropped membership requirement to have to join one of the national clubs some time back. We formed a LLC and do have insurance, not sure about the non profit part. Our clubs only income is from the Portland Swap Meet we don't do car shows or bake sales etc. We as a club do not put the swap meet on. The 5 or 6 clubs that are involved in the swap meet have it under a different Corp. or LLC and we (our club and the other clubs) receive payments like investors. Members of the clubs involved do volunteer work at the gates etc during the meet. Being an LLC protects the members of our Model T club from being sued personally if an accident happens when on tour. We still have to have individual auto insurance which you would still have to have if under any policy from the national T or A clubs.