Exempt Organization fundraiser

[Bill Tubbs]

Local band is 501(c)(3), and consists of adults (average age 60) -- I am one of the approximate 60 members. Normally plays concerts in one city in Wisconsin. Their purpose on their incorporation papers is quite vague (I have it here somewhere...). Band is planning 10-day trip to Europe and will play 3 concerts while there -- yes, there will also be sightseeing (which is the reason for this posting). As the band does fund-raising, will all the contributions for this trip be tax-deductible, or only the portion related to the transportation of the band equipment (instruments, etc.) as there is a significant portion of personal enjoyment to this trip? Or perhaps some other percentage -- perhaps the additional cost of sightseeing is not deductible, but the cost to travel from US to Germany and within Germany to sites the band plays at would be deductible?

Are there any Rev Proc's or other cites that I can bring to our Board? If only a portion of the trip expenses are deductible, then I would presume that the fund-raising up to that amount would be deductible.

Also, a local high school band is doing fund-raising to play in one of the Bowl Game parades on New Year's Day. Would contributions made to the band for that trip be fully deductible? (same thought process?)

Bill

[Bees Knees]

One place to start is TTB, page 4-17 which gives an overview of deductible travel while doing volunteer work for a charity. The conclusion seems to be that if the majority of the trip is spent on the actual volunteer work, the trip expenses are deductible. But if the volunteer work is only a few hours a day and the rest of the day is spent for recreation and sightseeing, then none of the travel expenses are deductible. It appears to be an all or nothing situation.

Your question, though, appears to imply that cash contributions are made to the organization, and then the organization pays for the trip on behalf of the performers. You have to be careful not to lose your exempt status if the performers get all expense paid vacations as a benefit for volunteering for the organization. I’m not sure why a band would qualify for exempt status under those conditions. A public school sending kids to perform at the Rose Bowl would qualify because it serves an educational purpose, and is no where near the majority of the activity of the public school. But a bunch of 60 year olds forming an organization so you can travel Europe is not the same.

Having said that, do you have any openings for a piano player? Or Drummer? Or Bass? If not, I suppose I could pick up a French Horn and polish up on that again.

[Bill Tubbs]

cash contributions

Your question, though, appears to imply that cash contributions are made to the organization, and then the organization pays for the trip on behalf of the performers. You have to be careful not to lose your exempt status if the performers get all expense paid vacations as a benefit for volunteering for the organization. I’m not sure why a band would qualify for exempt status under those conditions.

That's what I'm trying to find out here because the band does not want to lose our 501(c)(3) status because of this trip. BTW, the Articles of Incorporation state, in part:
"The purpose [is] exclusively for charitable, education, religious or scientific purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code which shall include specifically, but not by way of limitation, performing free concerts to raise spirits, celebrate results, and to foster music appreciation in the community."

I'm hoping someone out here in Cyberspace has run into this before and has some research they would be so kind as to share with me.

A public school sending kids to perform at the Rose Bowl would qualify because it serves an educational purpose, and is no where near the majority of the activity of the public school. But a bunch of 60 year olds forming an organization so you can travel Europe is not the same.

What educational purpose does a 5-day trip to march in the Rose Bowl play? Only one day is actually spent in the parade, the other 4 days are basically recreation -- so I see quite a parallel.

This adult band has been around for 25 years, and the trip to Europe is a special Silver Anniversary trip.

Having said that, do you have any openings for a piano player? Or Drummer? Or Bass? If not, I suppose I could pick up a French Horn and polish up on that again.

Actually we could certainly use more percussion, and trumpets. Right now I'm the only percussionist going on the trip, and I'm actually more of a saxophone/bassoon player. I have never done the snare drum, but they're telling me I have til August to figure out how to do it. Ahhhhh!!!

[Unregistered]

That's what I'm trying to find out here because the band does not want to lose our 501(c)(3) status because of this trip. BTW, the Articles of Incorporation state, in part:
"The purpose [is] exclusively for charitable, education, religious or scientific purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code which shall include specifically, but not by way of limitation, performing free concerts to raise spirits, celebrate results, and to foster music appreciation in the community."

I'm hoping someone out here in Cyberspace has run into this before and has some research they would be so kind as to share with me.

What is the benefit to the general public from this trip?

[Bill Tubbs]

benefit

What is the benefit to the general public from this trip?

The band will be participating in 3 concerts, all free to the public in Germany. Plus, does fostering good will between the US and Germany count?

Year-round we perform free concerts in Wisconsin. If we made a day-trip to Illinois or Michigan, I think we would agree that the expenses incurred for that trip we could raise funds for, and the donors could deduct as charitable contributions. What if we took a bus out to the Dakotas for a couple concerts (and happened to stop at a couple tourist places on the way)? Would that still qualify? What if we flew to California, or flew to Europe, as a concert trip?

By the way, there are a couple touristy stops planned, but mostly when we get to each city the time before/after each concert is largely unplanned -- to allow for the less mobile members of the band to just take it easy while the more mobile members have flexibility to take in sites -- then also, those of use who take in more sites will be playing that extra $$ out of our own pockets. We are hoping to raise enough money to cover the airfare to get there and back -- we don't expect to have the trip become 100% paid for via donations.

Bill