Change is afoot club leaders! Stoa is ending the 501(c)3 Group Exemption program.
One of the most fiscally and legally valuable actions a club can take is to incorporate and obtain 501(c)3 tax exempt status. This is particularly important for medium and large-sized clubs who host tournaments. Since Stoa’s inception, the Board has sponsored a program called Group Exemption. This program allows clubs to gain nonprofit status through Stoa. It was far easier and cheaper than going to the IRS directly. Until now.
The IRS has rolled out a new, simpler and less expensive way to achieve 501(c)3 federal income tax exemption. It is called Form 1023-EZ. And it really is easy – only three pages. And inexpensive – a $275 one time fee.
The 1023-EZ path has several advantages over Group Exemption:
- Less paperwork to both initiate and maintain (annually) nonprofit status.
- Less expensive. Group Exemption costs $400 to initiate and $250 annually for our attorney to process “re-upping” paperwork.
- Club inclusion in the federal nonprofit database. Donors will be able to look up your club name and quickly get confirmation of your legal standing as a nonprofit. This has sometimes proven difficult to do for Group Exemption associates.
This is a big change for clubs currently participating in the Group Exemption program. As such, Greg DeJager will be supporting each of you individually as necessary through the transition.
As Stoa Treasurer, one of Greg’s jobs is to encourage and support our membership around fiscal and legal issues. As such, he strongly encourages clubs to incorporate and gain tax-exempt status. It is a wise and prudent step to take! (Matthew 10:16)