Proposed DCI Reorganization

[Stu]

Now, Stu...you're being a little apoplectic aren't you?

The point is to focus on what assets DCI already has that can be leveraged into another business not related to corps. Running the tour scheduling for marching band competitions (under the name of the circuit sponsor, like BOA), is an example.

Building a central repository for judges for all circuits is another.

The object is to think outside the box and think of other jobs that DCI can lever up.

Apoplectic? (nice word) but no, not at all. You should already know this: Running services like tour scheduling, venue scheduling, ticket sales, souvenir sales. etc... actually fall under the Related Business category in which DCI exists, so DCI can run those as non-profit services. For-Profit subsidiaries, however, fall under the category of Non Related Income (such as the Subway Sandwich Shop that I referenced). So for DCI, or a corps for that matter, to create a non business related for-profit subsidiary would take a huge amount of start-up capital and they would also have to pay corporate taxes on those subsidiaries.

[garfield]

Apoplectic? (nice word) but no, not at all. You should already know this: Running services like tour scheduling, venue scheduling, ticket sales, souvenir sales. etc... actually fall under the Related Business category in which DCI exists, so DCI can run those as non-profit services. For-Profit subsidiaries, however, fall under the category of Non Related Income (such as the Subway Sandwich Shop that I referenced). So for DCI, or a corps for that matter, to create a non business related for-profit subsidiary would take a huge amount of start-up capital and they would also have to pay corporate taxes on those subsidiaries.

So, let's say they run a venue contracting business within DCI, and some kid falls out of the stadium and is killed. The sharp lawyers see DCI as the target and the entire entity is at risk. If that business is separated from DCI in a subsidiary the liability would be limited to that entity and an impenetrable wall would shield the parent organization.

Worse yet, one or more of DCI's "ventures" are all profitable. Without walls between them they are all at risk for the liability of all the others.

That's why DCI needs to be reorganized.

Edited October 28, 2011 by garfield

[whitedawn]

Worse yet, one or more of DCI's "ventures" are all profitable. Without walls between them they are all at risk for the liability of all the others.

That's why DCI needs to be reorganized.

Well, that, and to be allowed to make money without serving some "mission" as defined by IRS Form 1023.

Also, to allow it to develop business ventures that don't need internal management.

[Stu]

So, let's say they run a venue contracting business within DCI, and some kid falls out of the stadium and is killed. The sharp lawyers see DCI as the target and the entire entity is at risk. If that business is separated from DCI in a subsidiary the liability would be limited to that entity and an impenetrable wall would shield the parent organization.

Worse yet, one or more of DCI's "ventures" are all profitable. Without walls between them they are all at risk for the liability of all the others.

That's why DCI needs to be reorganized.

I agree to split them up under their own incorps would help with liability insulation!!! But they would still be "related" income for DCI thus could be ran as non-profit entities as opposed to for-profit. And it is (For-Profit) subsidiaries such a the old Star of Indiana Aircraft Fueling Station which Danialray is proposing to be created within DCI; and those non business related for-profit entities would cost an arm and a leg to create.

Edited October 28, 2011 by Stu

[MikeD]

...and you have to pay corporate taxes on those for-profit subsidiaries; and in many states only a very small portion of revenue for a non-profit can be generated by for-profit subsidiaries (it is called non business related income) or the states will view you as a for profit entity and yank away your non-profit status;...

Yes, we do pay taxes on those subsidiaries.

[MikeD]

if they perform in festival class, A class or Open Class, there is a system in place to judge every band, regardless of style on that classification. So Festival is more "hey we want your band to look and sound better and for thekids to get more into performing, so let's not be totally cheerleaders, but be helpful."

That is great to hear.

[Jeff Ream]

So business increases, yet revenues stay the same???

80% of what DCI does should currently be outsourced. Good thing is that they can outsource to themselves.

Spin out the internal groups and outsource 80% of these activities to the newly formed subsidiary companies, who will also take on work for other clients.

As you add new clients, new projects, you new resources, supported by increased revenues.

This isn't ####### rocket science. This is pretty basic stuff.

ok but Daniel, the cash to start the splinter groups has to come from somewhere. You keep ignoring that fact

[Jeff Ream]

That is great to hear.

yeah it took a little while and a admin overhaul to finally get it going. I think A Class is going to keep growing as time goes on. One thing I like, and I know USSBA does this too is we let you choose your class from the get go. No waiting til 2 weeks before finals to be placed in a class like one other circuit does. Also, unlike indoor, no promotion system.

[danielray]

ok but Daniel, the cash to start the splinter groups has to come from somewhere. You keep ignoring that fact

I am not ignoring it... I have already addressed this.

Let me get very specific here (and this is about as clearly as I can explain it to you ... without finger puppets).

DCI sets up a new subsidiary focused on Event production...

The same guy who was working for DCI producing events for DCI shows up to work in the same office, sitting down to the same computer, talking on the same phone, but is now an employee of EventCo, LLC and DCI is his client. While at DCI, his role was mostly event production, but sometimes wore a few different hats. In his new role, he is focused exclusively on Event production and in addition to his client DCI, he has other clients where he is producing corporate events.

These corporate event contracts initially came from contacts within those of the drum corps community. Revenues from these contracts first go to build up an additional sales team in key cities (who will work from a home office). Further expansion is tied to and funded by increases in revenues.

[audiodb]

Well, that, and to be allowed to make money without serving some "mission" as defined by IRS Form 1023.

Here we go again.

1. I thought the purpose of this whole endeavor was to make more money for the drum corps activity. Are we serving that mission or not?

2. If so, how much does 501©(3) status limit what corps or DCI can do? We've had numerous corps running mini-casinos, bus companies, selling candy, washing cars....none of these operations (except, arguably, the bus company) have any greater relevance to the mission aside from how the proceeds are used.