The 1-26 Association is really two separate tax exempt corporations! The following will hopefully explain these two corporations and what they mean to you as a member.
- 1-26 Association, Inc…… a 501(c) a tax exempt corporation
- 1-26 Foundation, Inc…… a 501(c)(3) a tax exempt corporation
Note the difference is that little (3)!
- The “Association” is not allowed to solicit for donations. The monies the Association receives are not tax deductible because in most cases you are receiving something in return. You may be receiving a membership, t-shirt, or newsletter.
- The “Foundation” is allowed to solicit for donations and those donations are tax deductible. Monies received by the Foundation are truly “donations”. You will receive a formal receipt and a “Thank You” in return.
1-26 Association, Inc.
Purpose: “Promoting the sport of soaring and competition in the Schweizer 1-26 sailplane”
Benefit: The Association pays no income tax.
Nearly all of our operations are through the Association. Membership dues, 1-26 Championship support, awards, newsletter publication, merchandise sales, and expenses are all through the Association, Inc.
1-26 Foundation, Inc.
Purpose: “To support programs associated with the 1-26 glider”
Benefit: The Foundation pays no income tax.
Members may “donate” money to the Foundation. For example, you could leave estate money in your will to the Foundation. Donations are legally tax deductible. At this time, the Foundation only accepts cash or check donations.
Legally the Foundation could accept donations like a 1-26 glider for which the donor could claim a nice tax deduction. However, from a practical standpoint, the Foundation does not accept gliders or property because we have no hanger or garage to store such things. If you sell your glider or parts, the Foundation will be happy to accept the proceeds, which would be a tax deductible donation for you.
Unfortunately, even if you make a generous donation to the Foundation, you cannot receive a membership in return!
Some notable points:
- Both organizations must operate exclusively for educational purposes.
- The Association cannot ask for (solicit) for donations.
- The Foundation can ask (solicit) for donations.
- There is considerable IRS “grey area” in regards to how each corporation can spend its money. We don’t want to test the grey areas with the IRS, so we are very conservative in what we do.