Schola incorporation?
  • gregpgregp
    Posts: 632
    Our Google chant group has been discussing the process of a schola incorporating as a nonprofit 501(c)(3) so that it can do some fund raising and people can make tax-exempt donations to it. None of us had any experience with this sort of thing, and we were wondering whether anyone here did, and could offer any advice.

    MJ had several good points, so I'll quote them directly, because it's always fun to read her:

    "My preliminary explorations into the complexities of 501(c)(3) status for a Catholic cultural organization made
    me wonder (1) if it would be more trouble than it was worth and (2) risk of losing control.

    "Scholas who are not under the aegis of a parish or academic institution seem to be in a "grey" quasi-musical/cultural, quasi-religious territory. If we make our existence more "by the book," do we have to establish "bona fides" with the diocesan authorities?

    "Is it worth jumping through all the incorporation and IRS hoops so that some donors can get a tax deduction? The main advantage might be competition for grants from foundations and/or government agencies for programming
    (obviously not for singing Masses). Or are we better off to stick with bake sales, folks pitching in cash because they love us, and waiting on the 501(c)(3) business? "
  • It has pluses and minuses, pros and cons. It is a headache and you just might lose some control down the road. However, perhaps you should wait until you have significant financial income and or patronage. I believe that the time to seek Incorporation.
  • chonakchonak
    Posts: 8,776
    The expenses of operating a schola are low enough that you probably don't need fundraising. I say it's not worth the trouble. The group I know best has no regular expenses other than photocopying, and the group's leader just pays that out of pocket. I'm sure people would donate to cover his costs, but they're probably under $5/week.
  • matthewjmatthewj
    Posts: 2,669
    Also, as far as photocopying expenses go, you might be able to find a traditionally minded Pastor that would just allow you access to their photocopier and supplies. Perhaps if you sung Mass at that Parish now and then, they'd allow you access of their equipment regularly.
  • I agree. Unless you want to go after grant money - not sure what foundations give to religious groups, though - incorporating is not really a good use of your time and sanity. It's a bit expensive too. If you have a number of donors who really need the tax break, you might consider it, but this would be unusual. We have a donation basket present when we do Vespers services and folks have been pretty generous to us. We've been able to reduce our out-of-pocket costs for vestments in this way and future earnings will go towards purchasing vestments for our priests and possibly helping with travel to colloquium and such.
  • mjballoumjballou
    Posts: 990
    When I looked into nonprofit incorporation and tax-exempt status, it was with respect to a larger organization focusing on Catholic arts and music. In that case, there were potential issues of grant funding for performances, lectures and venue fees - as well as reassuring potential donors and/or funders of the organization's "durability."

    Right now, my Schola's specific expenses are covered by a couple of events for which we receive an honorarium and a concert that had "free-will donations." Everyone covered the cost of their performance clothing and we rehearse in my music studio. My second best friend is a combination printer/copier/scanner. My first best friend is the CMAA and its wealth of resources.
  • gregpgregp
    Posts: 632
    I understand what you're all saying, but is there any other choice between incorporating as a non-profit and having a donation basket? We have groups who want to donate, but would like more structure than, "Oh, just give Greg the money - he'll make sure to use it prudently!"
  • You can associate yourselves with an arts organization...or church...or KOC chapter...that already is a charity and they can then pass the funds that come in on to you. This eliminates the need for any filing yourselves. This is done all the time...and it makes the arts organization or whoever does this for you look good.

    You may seek funding then with this organization as your sponsor. It's legal.

    You tell people, "Make out your check to XYZ and note that it's for the Schola Education Fund.

    If things grow you may find yourselves then breaking off so that you can take advantage of certain funding available for new groups...

    When applying for arts funding it is very important not to tell them what you want, but to find out what they want to fund. I walked into the George Gund Foundation with a proposal to fund a resident string quartet in innercity schools and walked out having been told that they did not fund that sort of thing..."What should we ask for?" Funding for secretarial office support for a beginning arts organization. We did and got $40,000 35 years ago...
  • gregpgregp
    Posts: 632
    FNJ, that's a great idea!
  • frogman, I agree, that's the best way for smaller groups. Just be careful about any overhead a parent group might want. Get your agreement in writing.
  • It's a feather in the cap of any arts organization to foster new groups and programs and the ones that I have been familiar with do not ask for a cut of any funds filtered through them. They don't pay taxes, so the only expense to them is really only for secretarial and bookkeeping...if that became too time consuming for they to do it for free, it would be a sign that you are making enouhg money to break off.

    Caution to all...a very few arts organizations WILL try to take over any group they help don't sign over any rights to them.
  • mjballoumjballou
    Posts: 990
    Michael is right - get it in writing.

    This "incubation" process is very popular in start-up circles, both non-profit and entrepreneurial. I'm not sure how welcoming some arts organizations would be to something they perceived as "religious" and not cultural. But it would certainly be worth asking.