Monday, July 15, 2019

The Ins And Outs Of Disc Golf Clubs Part 2 - What's Your Status?

If you’re just now joining us for our latest blog series, welcome! We’ve recently started discussing the huge topic of disc golf clubs and will be reviewing all of the most important information you need to know if you’re interested in starting one. Before going any further, head back to Part 1 of this series where we make sure everyone is on the same page.

All set? Good, because we’re about to get a little more detailed moving forward. The truth of the matter is that any disc golf club isn’t much different than a business, so if you or your friends are looking to establish one, it’s not as easy as making up some flyers and advertising around town. Let’s discover your options for making this decision an official one, should you so desire.

What Is A Nonprofit?

When this word comes to mind, most people think about donations and tax write-offs. While many nonprofits do include those elements, there’s more to them than you may think. According to Wikipedia, a nonprofit is “dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization that uses its surplus of the revenues to further achieve its ultimate objective, rather than distributing its income to the organization's shareholders, leaders, or members.”

Sounds like a disc golf club, right? While you won’t necessarily be forced into formalizing your club in this way, it can hold its fair share of benefits, especially if the club gets to be rather large. Establishing a club as a nonprofit will also force members to create bylaws and articles of incorporation, which again will help to keep things organized should you become incredibly popular.

First Things First

Disc golf clubs can, and may want to, formalize themselves as a nonprofit on both a state and federal level, and like any other business action, it requires a fair amount of paperwork. We spoke with Ray Woodruff, President of the Mile High Disc Golf Club in Denver, CO to get a little more insight on the matter. He shared with us a bit about their own nonprofit journey, a decision that became very apparent as they neared 600 members:

“In the beginning, nonprofit status was sought and obtained within our state, but the federal level was pushed aside for the time being. This has come to haunt us since paperwork is the death of any good organization, even a fledgling disc golf club. As time went on, it became painfully obvious that we would need to complete the federal process for our nonprofit status.

Bring in the lawyers... Nonprofits can be set up in many ways - the one that most people think of are the places that we donate money to and can deduct from our taxes, but that doesn’t always work for a disc golf club. We are currently speaking with tax advisors to complete the setup of our club's federal nonprofit status and hope to be finished with that process by the end of the year. While we are hoping for a charitable designation, we know that the IRS decides that based on your application.”

As you can see, setting things up right off the bat will likely create smoother sailing down the road. Disc golf clubs can always begin their operations without any formalization and then change their minds later, but it may become a bit more complex to do things this way. If you’re serious about your club, opt for nonprofit status as soon as you can to get things started on the right foot.

Stay tuned for more in this series, including things to consider when choosing your board, how to handle club finances, and more!
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