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Discussion: For profit versus non-profit structure for race company

in: Adventure Racing; General

Dec 10, 2015 2:09 PM # 
A questions for all you race directors out there....

Is your company organized as a private for-profit business, or as a non-profit? Why did you choose the structure that you did? Are you happy with how you organized it?

I'm interested more in the structure of the company, rather than paid employees versus volunteers, as each structure could rely on both types of helper.
Dec 10, 2015 3:39 PM # 
Where are you located? There could be some legal/tax differences that might affect the choice.
Dec 10, 2015 4:12 PM # 
The US. Based on my research, what we want to do is eligible for 501(c)3 status, I'm interested in why different race organizations choose to structure the way they did. We're looking at pros and cons.
Dec 10, 2015 6:04 PM # 
def reach out to abiperk about this. she just founded a non-profit race company, Rootstock Racing.

in my limited experience as RD (1 race), we could have gotten a permit from our state Department of Conservation for free if we were a non-proft. instead we paid $500.
Dec 10, 2015 7:13 PM # 
Thanks, @silkychrome. Yes, definitely happy to chat - Broots and I did a lot of research before electing to go the nonprofit route, and one of our primary reasons was exactly that -- access to land that we wouldn't have (or that would cost a whole lot more) if we were for profit.
Dec 10, 2015 9:53 PM # 
You might want to talk with with Doug Crytzer of NAARS they just went non profit. He is in Belize until the 18th.
Dec 11, 2015 5:34 AM # 
If the US is similar to Australia, well you can't just pay yourself the 'profits' from a non-profit organisation just because they need to be distributed. Mind you, we have 'non-profit' and 'not-for-profit', which are also two different things. Not-for-profit entities tend to be run to benefit a large group of members (no cash payments to members but proceeds are used to further progress member interests) whereas non-profit are not allowed by law to make profits and are on the whole charity organisations (so proceeds are used to benefit the community).
Dec 11, 2015 3:17 PM # 
In the US, the distinction between the two is really subtle and unimportant in terms of the question of profits, but in both cases, being a non/not-for-profit doesn't mean that you can't compensate people for the work they're doing. It just means that revenue that comes in beyond compensation needs to go back into the organization.
Dec 14, 2015 6:27 AM # 
Yeah that's the same in Aus.

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