Opportunity Quilts

Nancy,

I am down in Southern CA. We have an opportunity quilt every two years when we put on our Quilt Show. The money has never been used to send entirely to a particular charity. We use it to assist Philanthropy with their projects, speakers, hugs-- as requested by an outside organization, etc. Please let me know what information you come up with as our opportunity quilt is almost finished and about to make it's rounds to the various guilds since our show is in June.

Debbi in SO CA

Nancy wrote:

This has been talked to death in our local guild off and on over the years. Some info here if you nose around:

Our guild seems to run the proceeds from the opportunity quilts with the small local show they do every 2 years. I don't think anyone is trying to hide anything but that it is just an easy way to do bookkeeping. There seem to be a lot of gray areas. From what I understand some guilds have thousands of dollars in the treasury while there really is little true charitable contributions. (excepting charity quilts) Taria

Debbi > Nancy,

I'm not in California, so the regulations may be different. However, my guild's quilt show, held every two years, is a major source of support for the guild,itself a non-profit organization. We have a raffle quilt and a small quilt auction; half of the proceeds of each is kept for the guild and half is given to various local charities, with the specific charities determined in advance. The rest is kept in the guild's treasury to be used for rent, speakers, library books, newsletter, etc. This helps to keep our dues at a reasonable level.

Our bank balance does always look pretty substantial, but it is my understanding that we are required by law to maintain reserves sufficient to meet all our contractual obligations -- rental agreements, speaker contracts, etc.

Julia > I just recently found out from one of the board members of our guild,

Remember that an organization that is a 501(C)3 -- non-profit -- does NOT mean you have to give all your money away. What it means is that no individual reaps the benefit of the "profits" of the activities of the organization. The monies are used to keep the organization going and for philanthropic uses determined by the organization. In a service organization (In a past life, I was the CEO of a United Way non-profit that provided early intervention services) you may host picnics for your clients or you may bring in guest speakers or provide "scholarships" to individuals who cannot afford to pay for the services you provide.

In the case of a quilt guild, monies made from an opportunity (raffle) quilt -- do not NEED to be given away to a charity ... unless that is what you advertised and promoted in the selling of the tickets. You may keep the $$$ in your guild treasury to support the guild. This may be in bringing in notable national speakers, paying your room rent, building a guild library, buying fabric to make quilts or other projects for charity. What it cannot be used for is for the president to go on a quilting cruise or to buy the treasurer a new top-of-the line Bernina or Pfaff.

I'm not a lawyer -- but have worked with and for non-profits for over 20 years and this is my understanding. If you are in doubt -- call the IRS helpline... and ask what the rules are regarding non-profits ... or follow-up with your State Gaming Board regarding raffle rules.

Congrats on a successful opportunity quilt!

Wow, great information Kate. I'm saving this in it's own file. Our state's raffle license states that the proceeds will be for charitable puposes, which we have used in our guild's outreach programs, and even our own education programs since anyone in the community is welcome to attend them.

This is a new, or until recently unused, rule which affects all organizations under a certain non-profit status. Our guild took it to a tax lawyer, and was told we cannot put ANY of the money in the general fund. We plan to donate all but a small amount which will be used ONLY for charity quilts. This is a change.........if it is true in Arkansas too.......it must be Federal.

First off, I would just focus on California law. While other state laws may be interesting, they don't apply to a guild in California.

Second, the law hasn't been "ignored until recently" as someone stated. The raffle law was passed in 2000.

Third, the law applies to certain organizations. Make sure your guild fits by being exempt from taxation.

NCQC did a nice program on the raffle law when it was passed, if your guild is a member you might consider contacting them for further advice.

The raffle code is easy to access on the web so you can read it all.

As our guild interprets the law, 90 percent of the gross needs to be used for charitable or other benefits. Benefits cannot be received by the board, directors or members but rather the community at large. For our guild the community is invited to attend both meetings and workshops.

marcella

Another point of reference would be a tax professional. A seasoned professional will know the tax laws regarding the non-profit status of your guild. Debra in VA See my quilts at

"Nancy" wrote:

Our guild (in California) puts all money in our general fund. We do make a number of donations throughout the year to charities, and we do several events to educate the general public. Best to talk to a professional about this, but the way I understand it, we are registered as an educational non-profit, and so we have to do a certain amount of educational activities during the year.

Just wondering how the president of your guild has the authority to unilaterally spend money? In ours, the whole board has to approve any money going out over a very, very small amount.

If it comes down to it, the guild can always contact Lawyers for the Arts.

I called them when we were updating our bylaws and weren't sure about something. They were nice enough to simply answer my question over the phone for free, but they also have seminars and will answer related questions there or you can pay something like $35 for a half hour consultation with a lawyer. marcella