Possible Non profit

[MeganDLG93]

So my husband runs a football team here in Texas. It's semi-pro. He wants to make it a non profit, so he can start getting sponsorships from local businesses. (They said they will not sponsor unless he files for some kind of non profit form.) I'm trying to figure out how to go about doing this or what all needs to get done in order to become a non profit. Any information helps. Thanks in advance!

 

[quincy]

So my husband runs a football team here in Texas. It's semi-pro. He wants to make it a non profit, so he can start getting sponsorships from local businesses. (They said they will not sponsor unless he files for some kind of non profit form.) I'm trying to figure out how to go about doing this or what all needs to get done in order to become a non profit. Any information helps. Thanks in advance!

Here is the Texas Secretary of State website with information on creating a nonprofit organization:
https://www.sos.state.tx.us/corp/nonprofit_org.shtml

 

[xylene]

He should be sure the objections on non profit status are true, and not a smoke screen because they would simply prefer to decline.

Businesses and companies sponsor amatuer, semi pro, and professional sports ALL the time.

Also he should look at league rules. And the feelings of players.

 

[Taxing Matters]

So my husband runs a football team here in Texas. It's semi-pro. He wants to make it a non profit, so he can start getting sponsorships from local businesses. (They said they will not sponsor unless he files for some kind of non profit form.) I'm trying to figure out how to go about doing this or what all needs to get done in order to become a non profit. Any information helps. Thanks in advance!

Nonprofit, tax exempt, or both? There is a difference, and it matters as to what he needs to do and whether he can qualify for it.

 

[adjusterjack]

Also check the IRS rules.

 

[quincy]

MeganDLG93, although forums can be a great place to gather information, your husband will eventually want to sit down with a business law professional in your area to discuss specifics and objectives, and figure out the best way to accomplish his goals.

 

[xylene]

And assesses carefully what the real goal is.

Is his goal to get business sponsorship, or is it to placate one or more specific possible sponsors who are at this point doing... basically nothing but making big demands on an issue that in NO WAY preclude their becoming athletic team sponsors.

Maybe these people making the objection should be in on this process, and perhaps they could be hit up for some money/resources to make the change they insist on. Become founders or the like. Certainly would be a fair if a bit acid test of the their real interest.

 

[LdiJ]

He should be sure the objections on non profit status are true, and not a smoke screen because they would simply prefer to decline.

Businesses and companies sponsor amatuer, semi pro, and professional sports ALL the time.

Also he should look at league rules. And the feelings of players.

Yes, but they want to be able to deduct the sponsorship money as a charitable donation. They cannot do that if the organization is not an official non profit organization.

 

[Taxing Matters]

Yes, but they want to be able to deduct the sponsorship money as a charitable donation. They cannot do that if the organization is not an official non profit organization.

I kind of hate to harp on terminology, but in this instance it matters: if the contributors want a tax deduction, the organization must qualify as a tax exempt organization under IRC § 501(c)(3). The term "nonprofit" has no real meaning in tax law, as you know. However, a number of states do allow the formation of "nonprofit corporations". The requirements for those are different than for federal tax exemption and the charitable tax deduction.

And the thing is, for a business there are a lot of ways to make the donations to a sports team into a business expense that it can deduct that it isn't really critical that it be a tax exempt charity. And as this team is "semi-pro" it may not qualify for tax exemption anyway, more information on exactly how this activity is run would be needed to sort that out.

 

[LdiJ]

I kind of hate to harp on terminology, but in this instance it matters: if the contributors want a tax deduction, the organization must qualify as a tax exempt organization under IRC § 501(c)(3). The term "nonprofit" has no real meaning in tax law, as you know. However, a number of states do allow the formation of "nonprofit corporations". The requirements for those are different than for federal tax exemption and the charitable tax deduction.

And the thing is, for a business there are a lot of ways to make the donations to a sports team into a business expense that it can deduct that it isn't really critical that it be a tax exempt charity. And as this team is "semi-pro" it may not qualify for tax exemption anyway, more information on exactly how this activity is run would be needed to sort that out.

I do tend to use layman's terms. However, I am curious as to what other ways there are to turn that kind of donation into a business expense. Do you have an example?

 

[Taxing Matters]

However, I am curious as to what other ways there are to turn that kind of donation into a business expense. Do you have an example?

Have the business name printed on the game day program, somewhere on the uniforms, somewhere in the park/stadium, on the web site or whatever and treat the cost as an advertising expense.

 

[LdiJ]

Have the business name printed on the game day program, somewhere on the uniforms, somewhere in the park/stadium, on the web site or whatever and treat the cost as an advertising expense.

Duh, of course. I cannot believe that I didn't see that! Our firm gets solicited all the time for that kind of advertising.