Comments by Renee Szudy in an interview by Bonnie Berquam...
Do we have a new legal structure?
YES! We’re now a 501c7. We have officially filed the Guild of Middle Eastern Dance as a 501c7 organization. This legal structure is designed for a social club organization and fits the way we have been operating, for the benefit of our members.
What was the reason for making the organizational change?
Previously, it had been difficult to manage Guild finances and update bank accounts since we didn’t have proper documentation.
We now have a clear legal structure with updated bylaws.
- We are defining practices and guidelines for officer roles to provide continuity as different people move into those roles.
- The structure and documentation allow us to establish proper financial accounting.
- We can more easily complete the required financial and tax reporting, which is now required for all social clubs.
- The legal structure helps limit liability for those serving on the Executive Board.
- We have applied for tax-exempt status.
How do you know that’s the right organization structure?
We started by getting legal advice. This is where I have to stop and do a deep bow! We are so grateful for the deeply discounted services and guidance provided by Guild member Pook Grathwol of Chestnut Cambronne Attorneys at Law. We met with them and described the Guild and how we are formed and operated. They helped us determine the organization type with the best fit and have been assisting with filings and documents.
Wasn’t this a BIG undertaking?
Yes, it was and we’re still working on it! Your Executive Board has been hard at work in several special committees to make all of this happen.
Huge kudos to:
- Renee (First Chair) and Cath (Treasurer) for spending many hours with legal counsel and then implementing the new P.O. box, filing documents, obtaining a tax ID, setting up bank account, updating PayPal (and much, much more);
- Renee, Emalee (Communications) and Bonnie (Events) for reviewing and revising the bylaws and officer roles, and beginning to create policies and procedures;
- Renee and Cath for building a repository of documents and communications for future reference;
- Bonnie for updating the Guild website content based on new language;
- LaDonna for taking our social media to a new level with regular posts for events, Throwback Thursdays, and more.
- Emalee, Thuy and Bonnie for developing a new member welcome communication process.
- MANY thanks to Cath for being the inspiration and the driving force to bring our bookkeeping structure and records up to date.
In the past some Guild Executive Boards have explored implementing a nonprofit status, but then found the process of change to be quite involved and the regular accounts and annual filing requirements to be onerous. So, the idea was tabled. At one time the Guild had started to file to be incorporated as an S corp, which was not a good fit, and that was dissolved.
Why not a 501c3 nonprofit? How is this different?
Good question! The nonprofit 501c7 is a social club organization and it is designed to benefit members of the club, compared to a 501c3 that exists to serve the public. We had a lot of discussion about which one was a good fit. How we operate our club currently fits best as a 501c7, as confirmed by the legal experts.
Can we apply for grants as a 501c7?
We would surely like to do that. We have discovered there is a way to work with a 501c3 sponsor to apply for grants. We plan to explore this in the future.
How will members benefit from this new organization?
- Creates clarity around the organizational structure and procedures so that people who take on roles on the board can more easily step in
- Executive Board Officers have more legal protection
- We now have a current Tax ID
- We are not excluded from grants, we just need a 501c3 sponsor
- We can formalize the management of the organization’s finances
- It allows us to comply with updated tax filing requirements for social clubs
Now that we have this foundation in place, there is more motivation to develop procedures that provide clarity about how each Executive Board role works and how to easily pass them on to others. We hope this will inspire members to start imagining what we can do for our members and offer suggestions, attend a meeting or volunteer in some way.