Can anyone explain NHRA?

[bill dedman]

Before this goes any farther,

JULIE: is a "not-for-profit corporation" the same as a "non-profit corporation," or, are the laws governing them different???

Explain that, if you have time, please.


Bill

[Joe Pinkston]

Thanks for pointing that out Bill. When I re-read this I wondered if I used the right term or not.

[dartman]

Originally Posted by bill dedman

Before this goes any farther,

JULIE: is a "not-for-profit corporation" the same as a "non-profit corporation," or, are the laws governing them different???

Explain that, if you have time, please.


Bill

A non-profit organization (abbreviated "NPO", also "not-for-profit") is a legally constituted organization whose objective is to support or engage



Whereas for-profit corporations exist to earn and distribute taxable business earnings to shareholders, the nonprofit corporation exists solely to provide programs and services that are of public benefit. Often these programs and services are not otherwise provided by local, state, or federal entities. While they are able to earn a profit, more accurately called a surplus, such earnings must be retained by the organization for its future provision of programs and services. Earnings may not benefit individuals or stake-holders[1]. Underlying many effective nonprofit endeavors is a commitment to management. Twenty years ago, management was a dirty word to those involved in nonprofit organizations. It meant business, and non-profits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line. Now most of them have learned that nonprofits need management even more than business does, precisely because they lack the discipline of the bottom line. The nonprofits are, of course still dedicated to "doing good." But they also realize that good intentions are no substitute for organization and leadership, for accountability, performance, and results. Those require management and that, in turn, begins with the organization's mission.

[Julie Jordan]

A"non-profit" has become a generic name for a tax-exempt organization. The profits earned in these organizations are not subject to income taxes. They have profits (or else they won't be in existance long), can own properties, most anything a normal business can do. If they have "unrelated business income" then those profits are subject to tax.

NHRA is a 501(c)(6) organization (IRS code section).An IRC 501(c)(6) organization is a membership organization characteristically supported by dues. While such an organization may receive a substantial portion or even the primary part of its income from non-member sources, membership support, both in the form of dues and involvement in the organization's activities, must be at a meaningful level (thus we all pay annual "dues"). There is no requirement that the members have any say in the operations. The original bylaws and articles of incorporation or association would outline how the board of directors is determined.

No one "owns" NHRA. Should the organization dissolve or be sold the assets would have to be distributed to a similar type organization. Again, the bylaws would clarify where these assets would go. Most states (in California it would be the State Attorney General's office) would have to approve a sale and distribution of assets to insure they did, indeed, go to their intended purpose.

The NHRA Museum is a 501(c)(3) organization, basically a charitable organization. Payments made to this entity would be tax-deductible. Payments made to NHRA are not.

Probably the largest and most successful 501(c)(6) organization is the NFL.

[Greg Hill]

Julie the difference between the NFL and the NHRA is that the NFL management is accountable to the owners of the team. As far as I can figure out the board and top management of NHRA has no one to be accountable to. How are board members chosen?

[Tony Janes]

There is no comparison to the drag racing of the sixties and the present day drag racing.

[Bruce Noland]

Greg,
I believe the directors are voted in by the sitting members. The members remain on the board until they quit, voted off or die.

The HD proxy statement contains a lot of information about nhra's finances. I'll try to post some of the financial statements from 05,06,07 when I figure out how to do it.

Besides giving/paying out a few percentage points of the money it brings in each year a 501(c)(6) must meet at least 7 characteristics to receive a "grant" of tax exempt status. The 7 characteristics are fairly broad but there are some very thorny issues that could trip any 501(c)(6) if they don't stay on their toes.

lots of easy to read stuff on 501(c)(6)
http:www.irs.gov/pub/irs-tege/eotopick03.pdf

[Bob Pagano]

dragraceresearch, And their response was...........nothing I bet. You post makes sense but we know that went out long ago.

[Joe Pinkston]

Originally Posted by dartman

A non-profit organization (abbreviated "NPO", also "not-for-profit") is a legally constituted organization whose objective is to support or engage



Whereas for-profit corporations exist to earn and distribute taxable business earnings to shareholders, the nonprofit corporation exists solely to provide programs and services that are of public benefit. Often these programs and services are not otherwise provided by local, state, or federal entities. While they are able to earn a profit, more accurately called a surplus, such earnings must be retained by the organization for its future provision of programs and services.

If this wording, or something simular to it was part of the tax codes back in the mid 50's then that could explain alot.

It was before my time, but I guess NHRA was originated as an idea to provide services that were viewed as being of public benefit. I'm not sure you could sell that idea today (then again maybe you could), but I guess it was easy to prove that what they were doing was something of public benefit back then. I would assume as long as the terms of the original charter were not broken in any way it would still be legal and valid up until today.

Bruce; thanks for the link to the IRS documents.

[bill dedman]

Thanks, Julie.
This is in no way a reference to NHRA, but from what you described, it (non-profits) sounds like a license to steal.

Just my 2-cents...


Bill