5013c Help

[FrankJ]

The 501C has an obligation to sure that the funds under its control are used for tax exempt purposes & track them in an auditable manner. While what you propose is not "illegal", I can see why they would have a problem with that. They have a lot of freedom on how that is done. It sounds like the ASB has thought through its policy and is probably set in its ways. If it is associated a school, it might well have policies dictated by the school. They probably have a limited ability to deal with different rules for different clubs. Definitely worthwhile to talk to them, but do not be surprised if the answer is 'we have to follow our policy". You might be able to work out a "petty cash" fund that would be refilled as receipts are turned in. Or maybe a budget they can preapprove.
The advantage of having your own 501C is they can more nimble in the way they handle funds.

[EricH]

A proposal that might work:

Discuss with the ASB the restrictions you're under (particularly emphasizing the 6 weeks AND the FRC robot budget constraints, I think they'll be interested in those). Note that while 1 week is long enough for some items, say team T-shirts, for critical robot parts you need a faster turnaround, say 1 business day.

Then propose the following: Have one ASB approver designated for robotics, with a list of "normal" purchase types (metal, wheels, motors, etc.), locations (AndyMark, VEX, McMaster...), and let's just say a reasonable cost ceiling per order. For any purchase on the "normal" list, that person ought to be able to approve it QUICKLY (say, 1-2 business days), provided that a reason is noted on the request for funds, if the team is in build or competition season. For any purchase not on the "normal" list (let's just say, a drill press) or over a certain dollar amount, the approver may request more information from the team and/or a full review.

In essence, you're requesting a "fast-track" approval for certain items in a certain timeframe, and any item not in that list or larger-than-normal amounts of such items are subject to extra scrutiny. And you're asking that one of the approving parties be a point-of-contact, and thus relatively familiar with what the team tends to purchase, so that person can spot "funny" items even more easily.

I don't know for sure if they'd go for it, but it's worth a shot.

[sanddrag]

We've been doing this for 13 years and I still float everything other than registration on my personal credit card, even $7,000 airfare or hotel bills. Having someone quick with a credit card and a high limit has become a necessity for FRC, and it's the simplest way to do things. I get reimbursed through the school ASB account usually within 10 days time. Logging and copying the receipts ias a pain, but we have the process down. In a typical season, I'll make on the order of 120+ different purchases.

We'd like to do a 501c3 to qualify for more grants, but we haven't got it done yet. I would be interested in hearing more from others who have.

[cadandcookies]

Originally Posted by sanddrag

We'd like to do a 501c3 to qualify for more grants, but we haven't got it done yet. I would be interested in hearing more from others who have.

2220 has had our booster club incorporated as a 501c(3) since 2011 or so. I'd recommend looking at Section 6 of the FIRST Fundraising Toolkit. Specifically the associated webinars, which have more personal opinions on the process.

The 2220 structure is that the team itself isn't a 501c(3), but the booster club is. This enabled us to avoid the red tape associated with filing all the associated paperwork by using Parent Booster USA, which has a startup fee and then a recurring ($100) fee. We use this in conjunction with an online part ordering system to keep track of funds that go through the organization. We've gotten several grants via our nonprofit status that we wouldn't have been able to get otherwise.

I don't want to sound like I'm plugging it too much, but the FIRST Fundraising Toolkit section has a lot of great information and I'd recommend that you read those whitepapers and watch the associated webinars (they're a total of about an hour, and definitely worth the time). Good luck!

[Kingland093]

4215 has non-profit status from our school and they have set up an account for the robotics team. when we get money from a sponsor, we always request that the sponsor rights us a check so we can give it to the school's business administrator and he handles the depositing stuff for us. Not sure about the process for receiving grant money though.

When we want to order something, we use the head mentor's personal credit card and he gets reimbursed by the school from the robotics account.

We have found this system to be effective in getting parts quickly. I would recommend a mentor personally buying the parts and seeing if the ASB can reimburse them

[wilsonmw04]

have you thought about requesting blank PO's? Set an ammount at the beginning of the year and purchase away. You have the benefit of quicker turn around times and the ASB gets the control they need as well.

[Calvin Hartley]

4967 is a 501c3 and it certainly makes things much easier. I'm not familiar with the details, but I do know it was a long process for us. Don't expect to have it this season if you go for it. By next year, perhaps.

[Qbot2640]

Originally Posted by Calvin Hartley

4967 is a 501c3 and it certainly makes things much easier. I'm not familiar with the details, but I do know it was a long process for us. Don't expect to have it this season if you go for it. By next year, perhaps.

Could you elaborate on this...what takes a long time? I was sincerely hoping to have ours set up by February before we travel. We've got our bylaws written, and an application ready.

[Joe G.]

Originally Posted by Qbot2640

Could you elaborate on this...what takes a long time? I was sincerely hoping to have ours set up by February before we travel. We've got our bylaws written, and an application ready.

Approval of the 1023 form takes months, and that's if everything's in order the first time. Receiving the consultation to ensure that everything goes smoothly can also be time consuming.

[cadandcookies]

Originally Posted by Qbot2640

Could you elaborate on this...what takes a long time? I was sincerely hoping to have ours set up by February before we travel. We've got our bylaws written, and an application ready.

The IRS can take ridiculously long amounts of time to approve your 1023. Over a year is not unheard of. I've heard that recently they started streamlining the process, so it might be better now, but that was a key reason why 2220 took an alternative route-- we weren't willing to put 100 + hours into an application, wait 12 months, and then maybe get nonprofit status.

[Calvin Hartley]

Originally Posted by Qbot2640

Could you elaborate on this...what takes a long time? I was sincerely hoping to have ours set up by February before we travel. We've got our bylaws written, and an application ready.

As others have said, it can take many months. I believe it took about a year for ours, maybe more. Find another option for this season, but I think it is worthwhile for the future.

[Carol]

There are two steps to set up a 501c3. First you need to form a corporation, then you need IRS approval of your nonprofit status. the corporation step is very dependent on your state - different states have very different laws and procedures on incorporation.

MOE gave a talk many years ago on how to form your own 501c3 at the Championship robotic conferences. It's a little dated but the basic information is the same. It can be found at the bottom of the MOEU page at this link. There's been other talks, more recently, but i don't have the links handy.

http://moe365.org/moeu.php

[JesseK]

As far as how long it takes, I believe the one that I'm treasurer of took ~4 months between state & federal (and you can't do anything until you're accepted in both jurisdictions). We had some monumental help from people who have stood up small businesses before, so that type of support may be something for you to consider.

Another nifty idea which helped us in the beginning (consult your accountant first):

Set up your fiscal year to be from Feb. 1 to Jan. 31, rather than following a calendar year. This will allow you (in Virginia at least) to submit your taxes by May 15th rather than April 15th. It is much easier to find a pro-bono accountant for a May 15th deadline than a April 15th deadline.

[wilsonmw04]

we are in the process right now. We in informed two weeks ago that we passed the first hurdle by the IRS but the final decision will take another 90 days. Also remember that there is a $700 application fee for this as well.

[Monochron]

If you are part of a pre-existing 501(c)3 then it's officers and organizers are officially responsible for your finances. There is no real way to change that legally.

If they do not wish to allow you to operate in a way that is conducive to robotics education / design and construction then I would recommend you have a very nice and polite conversation with them to let them know you will be getting 501(c)3 status through other means. Like others have said, there are plenty of resources here on getting 501(c)3 status on your own (though it is typically arduous). You could also attempt to partner with a 4H organization or other that will get you 501(c)3, but the school might not be so keen on that.