General Category > Homebrew Clubs

501(c)(7) Why?

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Jimmy K:
You might want to read this thread.

Thanks mtnrockhopper.  We checked into liability insurance, and it's unattainable at the meir $24 per year membership dues.  We only have 38 members.  The last time I checked it would cost us around $400 to file a form 1023 alone.

Jimmy K:
I hear ya on that.


--- Quote from: mtnrockhopper on March 20, 2013, 12:50:38 PM ---
--- Quote from: tuelmen on March 20, 2013, 09:53:43 AM ---Have you heard the term “Self declared 501c7?”

--- End quote ---
I don't think it's an official designation, but it's also called "under the radar". The main reason to do this is to limit the liability of organizers. If you organize a club meeting and somebody gets drunk and kills someone - that person's family will probably sue everybody they can. Your personal assets may be on the line - house, car, bank accounts, etc.  As a 501(c), only club assetts are at risk. You'll get tax benefits too, but for a small club I don't think that will have much impact.

--- End quote ---

Designation as a non-taxable entity has no bearing on anybody's liability except for the payment of taxes on the club's receipts.

Bruce B:
Actually, because of our non-profit status we're able to obtain an umbrella policy for our officers.  That might not be a big selling point for smaller clubs but it might be for larger ones.


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