501 c3 Tax Exempt Status for GFWC-FL Clubs

from GFWC Finance Director

NONPROFIT GROUP EXEMPTIONS FOR GFWC CLUBS

We continue to receive questions from clubs requesting tax exempt status under GFWC’s group exemption as a 501c3. We would appreciate your assistance in furthering club members’ understanding of why we are not able to offer this.

It is true that for several years prior to 1989, GFWC did offer this umbrella coverage. However, in 1989, the GFWC Executive Committee decided to curtail further filings for clubs and state federations seeking nonprofit status under GFWC’s group exemption.

Reasons for this original decision include the fact that GFWC would have to hire additional staff to keep up with the paperwork and correspondence between the clubs, the IRS, and our accountants and attorneys. Additionally, GFWC is unable to act as tax advisors—tax-related issues are quite complex and can be confusing even for the most experienced legal consultants.

Since 1989, the GFWC Executive Committee has reviewed the possibility of adding clubs to the GFWC group exemption on several occasions, as recent as March 2007. Each time professionals were consulted, and GFWC was advised not to add clubs or state federations to the group exemption. GFWC would be responsible for ensuring that each club or state federation under the group exemption not only qualified to be added to the exemption, but that they continued to operate under all the provisions for nonprofit governance set forth for 501c3 organizations, the enforcement of which has become more stringent in recent years.

We regret that GFWC is not able to include additional clubs or state federations under the group exemption. While GFWC still maintains a group exemption, it is only for those clubs and state federations that applied and were approved prior to 1989. Clubs and state federations may, of course, apply directly with the IRS for their own exemption.

For questions, please contact GFWC finance director.

July 20 2007