The Purpose of DCI

[Eleran]

I think the difference is that conceptually, the logic was that the NFL entity, under 501©(6), was a trade organization to assist and support the individual for-profit teams, much like a non-profit local chamber of commerce exists to support the local for-profit businesses. The NFL, just like the chamber of commerce, was not making profits and distributing them to the teams. The actual profits should go directly to the individual teams, which are for-profit, and taxed accordingly. Of course, it appears that the actual internal machinations within the NFL and its teams have probably abused that conception so badly that they should all go to jail ...

DCI, on the other hand, isn't acting as a trade-association helping for-profit businesses under 501©(6), but is itself a 501©(3) organization, spending money on its own educational programs, or donating to other tax-exempt educational organizations (i.e. - its member corps, which are also 501©(3)).

Edited April 14, 2014 by Eleran

[Stu]

Dave Camp, Chairman of the House Ways and Means Committee has begun circulating draft legislation that will change the Federal tax code in ways called "...the most dramatic since the 1986 TEFRA...". Many things affect high-income investors in this draft which is why I was studying it, but two things jump out that may affect drum corps.

First is Sec 5002 which characterizes "Name and logo royalties" as Unrelated Business Taxable Income for tax exempt orgs like DCI. This may change the tax nature of any income DCI receives in name or logo royalties to be default taxable, or per-se UBTI.

Second is Sec 5301, which states: "Under this provision, professional sports leagues would not be eligible for tax-exempt status as a trade or professional association under Code section 501©(6). The provision would not apply to amateur sports leagues, which would continue to qualify as tax-exempt entities. The provision would be effective for tax years beginning after 2014."

If DCI and the NFL do, in fact, enjoy tax-exempt status for the same reasons, this legislation would require sports leagues to attempt to gain tax-exempt status under another sub-definition of the 501© code - could it be a harbinger of what might be coming for DCI's status?

(disclaimer: I'm not a tax professional)

(disclaimer – I am also not a CPA nor a tax consultant)

The way I have always understood Unrelated Business Income is that it is supposed to be defined as revenue generated from an organization owned business that has no relationship to the function of the organization. Since the royalities derived from the organizational name and logo directly relate to the organizational function in both DCI and NFL (I mean it is not like they are trying to use the logo for a DCI Floral Shop and Distribution Center, or a NFL Tutu and Dance Clothing Shop), I thus cannot see the logic behind Sec. 5002.

Even ‘if’ (I said ‘if’ y’all so don’t get your shorts in a wad) even ‘if’ DCI could be classified as a sports association, DCI and NFL would still not fall under the same 501c designation. For sake of example, let’s say DCI is considered a sports organization. DCI is an amateur sports organization which supports other non-profit amateur sports organizations which support amateur youth athletes; thus DCI would still fall under the 501c3 classification. Whereas NFL supports for-profit organizations which support for-profit athletes; thus the NFL falls under the 501c6. So I cannot see how Sec. 5301 could be applied to DCI.

Edited April 14, 2014 by Stu

[garfield]

I think Stu and Eleran missed the point of my reply to Slingerland.

[Stu]

I think Stu and Eleran missed the point of my reply to Slingerland.

Garfield: Your reply to Slingerland was, “If DCI and the NFL do, in fact, enjoy tax-exempt status for the same reasons,…”. My point is that they in fact do not enjoy tax-exemptions for the same reasons. One is professional c6 (NFL) the other is amateur c3 (DCI). If Sec 5002 happens to be implemented it would apply to both c3 and c6, but if Sec. 5301 is implemented it would only apply to c6. So, to me there would be no need for another sub-division of the 501c code.

[garfield]

Garfield: Your reply to Slingerland was, “If DCI and the NFL do, in fact, enjoy tax-exempt status for the same reasons,…”. My point is that they in fact do not enjoy tax-exemptions for the same reasons. One is professional c6 (NFL) the other is amateur c3 (DCI). If Sec 5002 happens to be implemented it would apply to both c3 and c6, but if Sec. 5301 is implemented it would only apply to c6. So, to me there would be no need for another sub-division of the 501c code.

Yes, I get it. So do you, you bonehead. Exactly what you said, that's the point. But I was addressing Slingerland's post that DCI <IS> like the NFL for these reasons. I was refuting THAT.

Wow, I have to work on my sardonic wit.

Edited April 15, 2014 by garfield

[Stu]

Yes, I get it. So do you, you bonehead. Exactly what you said, that's the point. But I was addressing Slingerland's post that DCI <IS> like the NFL for these reasons. I was refuting THAT.

Wow, I have to work on my sardonic wit.

I usually catch the mocking sardonic; it is the intelligence of wit I always need help on getting through my bonehead!

[Jeff Ream]

Of course this is just my opinion; but while there was a shake-up on the Board, and some contention just after the proposal was made public, I think the non-7 directors are still timid or slightly afraid of a real split or fracture. And because of that I think they are rather reluctant to tell any of the 7 directors something similar to what Mike Helton and Brian France of NASCAR told Toney Stewart when they bluntly told him, “Here is the thing Hoss; you need NASCAR more than NASCAR needs you. So, suck it up or go do your thing apart from NASCAR”.

that's a shame. Because it's true...the 7 need DCI. A lot.

[Jeff Ream]

You're welcome, Eleran....... and here is the DCP thread discussion from its very beginning. The OP secured the original G7 Power Point Presentation to the 7 Corps, and you can download the entire Powerpoint Presentation on the first comment on this thread from July 2010:

http://www.drumcorpsplanet.com/forums/index.php/topic/138778-can-i-read-this-article-without-my-head-exploding/?hl=%20power%20%20point%20%20presentation

#### whoever gave it out

[Jeff Ream]

SoundSport is a big idea.

The World Championship Prelims introduced in 2011, and the single scoring scale coming this year are big ideas. Those, combined with the strengthening we are seeing in the corps we currently refer to as "open class", could be steps toward growth of the DCI member corps community.

There were plenty of big ideas in the 2009 business plan, but those were put aside in the interest of reaching out to the G7. Instead, the big idea of TOC shows was pursued.

They need bigger.

[Jeff Ream]

Unless they get a funding mechanism for it, and create a real structure for the performances or judging, it'll likely be a footnote to WGI's Wind Division within ten years.

One of the two organizations has shown an ability to foster new participants, and it hasn't been DCI.