Forming a non-profit versus being under a school's jurisdiction

[Steven Smith]

3005 partnered with a local 501c3 that was specifically set up by a well off businessman in 2008 to support the local children in our area. They have been very interested in the robotics team, and have given us small donations over the years, so I would typically give them an update every 6 months.

I mentioned to them that the school purchasing was an issue, and I was thinking about making a 501c3 to fix it. The directors comment to me was "That is what we do. I have 3 bankers on this board that can handle all the paperwork, I want you to focus on working with the kids."

Because of my history with them, they were willing to set up a dedicated account for me with debit card access. I just provide receipts and expense justifications, which is as simple as taking a picture of the receipt with my phone and uploading it.

So to the other points, no a 501c3 is not so difficult to set up that you can't... but there is a lot of overhead. Make sure you talk to existing organizations in your area to make sure they wouldn't already meet your needs before setting out on your own.

[itsjustmrb]

FRC Team 4063 has it's own 501(c)3 non-profit status. I would like to add a couple things that I didn't see mentioned above.

Many times it is much easier to get donations from companies and organizations if they see your non-profit status.It allows them to deduct the value of most donations from their taxable income.

Check for accountants and lawyers that may be willing to donate their time and services to your team.

The benefits of our 501(c)3 are immeasurable.

[BSV]

Thanks, everyone for all the helpful information. This helps shed some light for a discussion we've been having.

Has anyone gone the 503(c) route and then decided that they wish they would have stayed with the school?

[Mr V]

Originally Posted by BSV

Thanks, everyone for all the helpful information. This helps shed some light for a discussion we've been having.

Has anyone gone the 503(c) route and then decided that they wish they would have stayed with the school?

Most teams I'm familiar with do not sever ties with the school. Many teams still maintain school accounts for grants to be deposited and to be able to set up Purchase Orders with companies like AndyMark or McMaster. Funds raised through booster club efforts then go into that account and are used for times when a quick payment is needed scholarships and other things that don't work well in the confines of the school system.

[GeeTwo]

Originally Posted by BSV

Has anyone gone the 503(c) route and then decided that they wish they would have stayed with the school?

Expanding on Mr V's answer (I started this morning before his post and decided to finish anyway):

Forming a 501(c)(3) to help fund the team does not mean that you have to break your association with the school, unless the school's policies forbid this.
In our case, it means a build and meeting space, a venue for recruiting, and "field-trip" excused absence for the students. The first two could be overcome, the third is essential.

Looking at the posters who did indicate that they formed/affiliated with a non-school organization:

• cbale2000: according to their website, team 703 is still associated with the Saginaw Career Complex where they formed.
• BitTwiddler: Team 1723 is still listed as associated with the schools on TBA.
• QBot2640: The team 2640 web site still shows an affiliation with the Rockingham County Schools.
• GeeTwo: 3946 is still fully in with the school
• Kevin Leonard: clearly states "20 has had a nonprofit since 2004 in addition to our association with the school". [emphasis mine]
• David Brinza: clearly identifies that 980 was already "a SoCal community team".
• Rosiebotboss: Team 839's TBA listing still shows affiliation with AGAWAM HIGH.
• John Retkowski: The teams listed were always community teams. See the first sentence under "Our History" at this page: "Team 316, the LuNaTeCs, began in 1999 with seven students and four mentors through a partnership with local businesses and educators."
• Steven Smith: Begins "3005 partnered with a local 501c3.."
• itsjustmrb: 4063 is associated with HS according to TBA.
  MrV: 5588 is associated with Holy Names Academy according to TBA.

Bottom line is that no one who has posted appears to have been involved with a team that was once part of a school that has completely severed ties. If you do consider severing ties, approach this at least as methodically as a robot design - figure out what you will gain and what you will give up before you make the commitment; there's probably no going back.

[itsjustmrb]

That is correct, TEAM 4063 is still associated with Del Rio High School. The 501(c)(3) is used to support the team in ways that the district does not. It helps pay for mentor travel expenses, items needed immediately for the build season, items not available via school district funding, etc.

[waialua359]

Rather than choosing one method since both have pros and cons, why not have both, or at the very least a partnership with a 501(c)3?
Our program has both, which allows the financial flexibility and timeliness needed to operate our FRC program.

[tylerc102]

Our school switched from ASB to the School's Foundation (read: 501c3) a couple years ago. Luckily for us, the check turnaround time is about a week and most of it is reimbursement based.

If I give any advice it is this: as the lead mentor and #1 contact between the school, foundation, and the rest of the team, never underestimate the value of having a good relationship with your foundation and school contacts.

A couple years ago, our team had a lot of worries about switching to the Foundation. These were based on a couple things, such as the Foundation didn't want to separate our funds into an account, or if they did they wanted to take 25% towards general operating costs. It sounded very weird to us and we were anxious about taking the leap.

It wasn't until I sat down with the people running the Foundation and talked it out with them that I got the complete picture. Yes, some of the fears were true. If we switched to the Foundation, legally the money that got donated could be used by other science and engineering areas of the school.

But, and this is a big but, by us having a relationship with the school, that doesn't matter as much anymore. The people directing the money know what type of funding we bring in, and we know that we will be taken care. In two years we've never had an expense denied and they've been thrilled to help us do incredible fundraising things (making a robotics camp that brought in 82k revenue this summer) that might have been impossible otherwise. We've actually worked with them to use money that we didn't earn to improve our workshop and build out our program. Its been a huge blessing.

I think for some teams, forming their own 501c3 will be the best move. However, I would highly encourage you to really look at your history with your school foundation, sit down talk with the people in charge, and try to see if you can make it work. Often times in these situations bad blood or miscommunication can form that can leave both sides with bad tastes in their mouth. But, given that both sides are interested in educating students, I firmly believe that it is worth a try to make it work.

Also, less paperwork and things to worry about. Running an FRC team is hard enough.

[Nate Laverdure]

Our booster organization received its IRS letter of determination yesterday, only 7 business days after submitting the 1023-EZ.

[WynS]

We operate through our school and we have an excellent relationship with the people there. I know that we are very fortunate in that respect. The bookkeeper has set up open PO's for our biggest vendors. With that said, for other purchases, I use my own dedicated credit card that we submit reimbursements for. If reimbursements are submitted in a timely manner, it all works smoothly. I understand that not all teams would want to go this route but it works for us.