“Oh Say Can You 501(c)”

Massad Ayoob was the last presenter before the lunch break, and he’s a difficult guy to summarize. He’s a very good presenter, and I was more interested in listening than writing about it. So sorry about that. I can see why he’s sought after by defense attorneys.

The first post-lunch topic is relevant to running shooting clubs, and since I’m an officer at mine, it’s relevant. My club is a 501(c)(7), but she covers all the tax exempt options. I didn’t really know that gun clubs could be organized under 501(c)(3) using an educational mission. I’m not sure I’d want to organize under that, because it changes how you’d have to run a club. I think it would be difficult for most clubs to manage without getting themselves in trouble. 501(c)(4) seems a more realistic subsection to organize under, but even that has the issue that the purpose of the organization has to be a public one. That means the club would have to be very open to members of the public. Neither 501(c)(3) or 501(c)(4) allow an organization to have a private benefit.

If you’re a gun club, I think 501(c)(7) is the best non-profit structure around which to organize. I’m learning a whole lot about how to manage (c)(7)s.

5 thoughts on ““Oh Say Can You 501(c)””

  1. I’ve managed a c(3) and a c(4).

    Running a gun club under c(3) would be hard, in my opinion. It’s darn near impossible to not cross certain political lines, and while the Feds might not care to chase the details your local/state gun control orgs will. Some were tempted to do a dual c(3)/c(4) to split the baby, but this makes everything twice as hard as before.

    I don’t know much about c(7), so won’t comment there.

    The money involved is pretty small in most orgs (in terms of “profit”) – most keep a small rainy-day fund and then re-invest the rest. I never understood why groups just don’t organize as a straight corporation (I helped convert one this way). The governance costs of a non-profit might actually cost more than the for-profit tax on the “income” at the end of the year.

    To do this you have to be a bit smart, and time your low balance to be at the end of the tax year. So move your membership drive to January and compute your taxes in December.

  2. Somewhat off topic but NRAAM related. Might want to go check in w/ Springfield Armory. On one of the rare occasions where TTAG got something right, SA cut a deal to drop opposition to a nasty anti-gun bill in IL as long as they weren’t included.

    1. Heard about it earlier, and we’re going to check it out a bit later. Sebastian had to meet with some folks on the floor about club business.

    2. The MD Dems were going to let the Beretta “Assault Rifle” be legal in MD in return for Beretta backing off. The scion of Beretta back in Italy said, “why is it in America I always have this trouble with Maryland?”

      Beretta told Maryland to shove off and decided to leave the state. I will forever be a Beretta fan after seeing that game play out. Went out and bought a pricey shotgun from them right after.

      Another gun maker in Maryland initially was working hard against gun control bills in 2013 but caved as soon as they got the exemption they wanted for manufacturing. It hurt the cause by removing pressure on Dems who had subcontractors of the firm in their districts.

      Legislating is dirty business all around.

  3. The club of which I am an officer is organized as a 501c(7), and that structure works well for us. We have a hunter safety organization that is a separate entity, but which uses the same grounds as the c(7). The hunter safety organization is a c(3) because its mission is educational. The c(7), being a ‘fraternal’ organization is tax exempt, but donations to the organization are not tax privileged (ie write-offs), whereas donations to the c(3) organization are. If we tried to organize both parts of the club as c(3) organizations, I don’t think we’d pass muster with the IRS.

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