Why won't DCI follow this type of path?

[MikeD]

And you just described BD, SCV, and many other DCI WC corps; thank you for accommodating that aspect!!!!

Well, as I said, I do not see them as doing ANYTHING immoral in setting themselves up as 501©(3) organizations, which is our disagreement.

Edited April 11, 2014 by MikeD

[Eleran]

Would you mind posting a link to this evidence you say exists that will prove the "original intent", please?

That would be impossible. Exemption for charitable, religious AND EDUCATIONAL purposes goes all the way back to the Wilson-Gorman Tariff Act of 1894.

[Stu]

I am not contesting the designation for BD, SCV, DCI, etc… as 501c3 organizations as it applies to the designation of educational, or heck, even to them applying it to them fostering national or international amateur sports competition! What I am contesting is them being referred to as charitable according to the ‘original intent’ of charity. Garfield wanted me to provide evidence of original intent. Well, here is a brief historical summary specifically concerning the 501c3 designation:

Acceding to most of the trusted historical accounts (not going to waste time finding them to formally cite them, I am not going to publish, and y’all can look them up on your own time if you want to) but according to most of the trusted historical accounts the intended purpose, and the actual language in the original 501c3 code, designated multiple criteria in which various organizations could be eligible as tax deductions. The first criteria was ‘charitable’, followed by other criteria such as the words educational, amateur sports, etc… All of these were to be considered as separate criteria as they applied to tax deductible status under the 501c3 code, and this separation of words was intentional; because from the beginning of common law long ago in England up to the day the 501c3 was drafted the word ‘charitable’ was considered as an action separate from all the other sets of criteria. However, and in some part due to the rising modern philosophy of living and breathing documents, the treasurer department along with the Supreme Court at some point decided that the first word, ‘charitable’, though originally intended to be separate from the other criteria, was to be from that point forward considered as a precursory word describing all of following words as opposed to a separate word in of itself. That is why I contend that organizations like DCI, BD, SCV, etc… while they are non-profit tax exempt under the 501c3 code as educational or even possibly as amateur sports, they were never ‘originally intended’ to be designated as ‘charities’.

[garfield]

They are not legally designated as "charities". 'Charity' is mostly a layman's term. Those groups are legally designated as not-for-profit educational organizations. The government feels that such groups, even though they charge entrance fees, are good for society and should be encouraged through tax-exempt status. That doesn't make them a 'charity' in layman's terms, nor have they applied for 501©(3) status under the "charitable" organization language. And some of those organizations (as will some charities) will produce nice salaries for their employees, and some will have all employees working on a volunteer basis. Doesn't negate the value of supporting them with donations, but each person comes to their own judgement over what is more deserving in their mind for their donations.

[501©(3) text: ... organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, ...]

EDIT: I see from prior posts that my response was redundant. Nevermind ....

There's another justification for "Public Charity Status" that is defined by the IRS itself. It's found in the Schedule-A of the 990 filing where, in Part 1, each filer in asked to justify their "Reason for Public Charity Status" by selecting one of 11 different boxes describing the justification. One is a church, another is a school, another is a hospital, still another is "medical research organization". The box that DCI checks justifying its status as a Public Charity is:

Box 9___ An organization that normally receives (1) more than 33 1/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions - subject to certain exceptions, and (2) no more than 33 1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975.

So, by IRC definition, because DCI is educational (and it is, wouldn't you agree Stu?) and receives more than 1/3 of its revenue from contributions, membership fees, and receipts from its exempt activity (drum corps shows) it is, distinctly, a "Public Charity".

So, there really is no vagary about DCI being a charity. Will their efforts cure cancer or feed hungry children in the developed world, or provide farm animals to underprivileged families in the undeveloped world? No. But even if those are common understandings of "charitable" work, the fact that drum corps is educational, not a hedge fund, and generates most of its revenue from its mission makes it a charity none-the-less.

[Stu]

There's another justification for "Public Charity Status" that is defined by the IRS itself. It's found in the Schedule-A of the 990 filing where, in Part 1, each filer in asked to justify their "Reason for Public Charity Status" by selecting one of 11 different boxes describing the justification. One is a church, another is a school, another is a hospital, still another is "medical research organization". The box that DCI checks justifying its status as a Public Charity is:

Box 9___ An organization that normally receives (1) more than 33 1/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions - subject to certain exceptions, and (2) no more than 33 1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975.

So, by IRC definition, because DCI is educational (and it is, wouldn't you agree Stu?) and receives more than 1/3 of its revenue from contributions, membership fees, and receipts from its exempt activity (drum corps shows) it is, distinctly, a "Public Charity".

So, there really is no vagary about DCI being a charity. Will their efforts cure cancer or feed hungry children in the developed world, or provide farm animals to underprivileged families in the undeveloped world? No. But even if those are common understandings of "charitable" work, the fact that drum corps is educational, not a hedge fund, and generates most of its revenue from its mission makes it a charity none-the-less.

Please refer to my post #263 as to why that is ‘now’ the way charities are designated but has not always been that way.

[Jeff Ream]

Man, you and I need to have a beverage.

Again, my point isn't that it wouldn't be fantastic to have that many participants. My point is that within the US, the market for drum corps is relatively saturated. More units wouldn't necessarily translate into more kids; just more small(er) groups. The point about WGI isn't that the unit numbers are a success; it's just simply that revisionist history indicates that in the 1970s, there were "all these corps" - but the reality is that their numbers and budgets more closely resembled that of indoor guards / indoor percussion groups of today... one bus, and traveled (far) to maybe one big competition.

As for WGI's "success", the reality is that their dues are paid through schools, mostly. As cixe stated that kids pay those fees, ya, sure they do. But the point is that WGI is receiving money for the right to perform (usually with school instruments), where DCI pays out its performers. That's not bad, but it makes DCI depend on ticket sales more, and WGI less. Relative, but fact.

Just to be clear, I don't believe XOM is sponsoring the PGA out of the goodness of their black hearts. However, it's basic PR. If we can't agree there, maybe this won't be productive at all.

I'm optimistic about the future of the activity, so long as it isn't so bound to its unnecessary "we've always done it this way" tendencies. I simply think that growth needs to not be focused on more units; there are as many as the market appears to be able to maintain. (No, it's not DCI's job, but it is important to offer a stable experience to maximize the money coming in from participants.) Revenue is important, and the traditional activity may not drive much more revenue as-is.

I don't think you're picking on me. I just think we're on polar opposites, and that's fine. I hope that we can find some things we agree on.

point of interest...I believe it has been said here WGI does subsidize some $$ to the world class groups. And sure, while scholastic membership pays the bills, in the rooms where power is wielded, world class rules all....15 finalsits on scholastic and independent get to sit down and tolerate 3 from A and Open from both school and Indy to make the rules.

There is a day, more guard side than percussion side where this is going to cause a HUGE problem for them. Scholastic Open and A are getting smarter

[GUARDLING]

point of interest...I believe it has been said here WGI does subsidize some $$ to the world class groups. And sure, while scholastic membership pays the bills, in the rooms where power is wielded, world class rules all....15 finalsits on scholastic and independent get to sit down and tolerate 3 from A and Open from both school and Indy to make the rules.

There is a day, more guard side than percussion side where this is going to cause a HUGE problem for them. Scholastic Open and A are getting smarter

JEFF:

the money to world guards has been talked about for over 30 years. Some were, ( not sure of figures ) were getting a pretty good chunk of change , many more than some guards budgets. It was increased by each year you made finals after 2 or 3 years. It's been so long , I can't remember exactly. There's always been a debate so to speak about WHY. There's a guard like Sac that's been in finals for decades, almost since the beginning.

At one time it certainly was incentive for world guards to keep this status.

So yes JEFF you are right and as things grow and change so will some of the past things and maybe percs will also change. You are also right about HS guards, THEY have always paid the bills and were the bread and butter of WGI HS A class is huge in comparison. Also right about the rule changes and how and who works that side.

Edited April 11, 2014 by GUARDLING

[garfield]

That would be impossible. Exemption for charitable, religious AND EDUCATIONAL purposes goes all the way back to the Wilson-Gorman Tariff Act of 1894.

After a little bit of reading here: http://www.irs.gov/pub/irs-soi/tehistory.pdf...

"The Revenue Act of 1909 mirrored and expanded

the language from the 1894 act. Under this statute,

tax exemption was granted to “any corporation or association

organized and operated exclusively for religious,

charitable, or educational purposes, no part of

the net income of which inures to the benefit of any

private stockholder or individual.” This important

addition set forth the idea that tax-exempt charitable

organizations should be free of private inurement—in

other words, nonprofit".

There's also earlier discussion of "public benefit" and "member benefit" orgs, as in a community group forming a hospital specifically to avoid government involvement, and "fraternal societies".

It does not appear to me that there is any "original intent" that "charitable" was to be recognized exclusively as "public benefit" in nature. Again, from the same link above...

"In 1831, during his historic

visit to the United States, Alexis de Tocqueville

observed:

“Americans of all ages, conditions, and dispositions

constantly unite together. Not only

do they have commercial and industrial associations

to which all belong but also a thousand

other kinds, religious, moral, serious,

futile…Americans group together to hold

fetes, found seminaries, build inns, construct

churches, distribute books…They establish

prisons, schools by the same method…I have

frequently admired the endless skill with

which the inhabitants of the United States

manage to set a common aim to the efforts of

a great number of men and to persuade them

to pursue it voluntarily.”1

[garfield]

Man, you and I need to have a beverage.

Again, my point isn't that it wouldn't be fantastic to have that many participants. My point is that within the US, the market for drum corps is relatively saturated. More units wouldn't necessarily translate into more kids; just more small(er) groups. The point about WGI isn't that the unit numbers are a success; it's just simply that revisionist history indicates that in the 1970s, there were "all these corps" - but the reality is that their numbers and budgets more closely resembled that of indoor guards / indoor percussion groups of today... one bus, and traveled (far) to maybe one big competition.

As for WGI's "success", the reality is that their dues are paid through schools, mostly. As cixe stated that kids pay those fees, ya, sure they do. But the point is that WGI is receiving money for the right to perform (usually with school instruments), where DCI pays out its performers. That's not bad, but it makes DCI depend on ticket sales more, and WGI less. Relative, but fact.

Just to be clear, I don't believe XOM is sponsoring the PGA out of the goodness of their black hearts. However, it's basic PR. If we can't agree there, maybe this won't be productive at all.

I'm optimistic about the future of the activity, so long as it isn't so bound to its unnecessary "we've always done it this way" tendencies. I simply think that growth needs to not be focused on more units; there are as many as the market appears to be able to maintain. (No, it's not DCI's job, but it is important to offer a stable experience to maximize the money coming in from participants.) Revenue is important, and the traditional activity may not drive much more revenue as-is.

I don't think you're picking on me. I just think we're on polar opposites, and that's fine. I hope that we can find some things we agree on.

I'm sorry, I appreciate the offer to share a beverage but I'm afraid that having more than 2 fingers of scotch in my belly wouldn't help me understand you any more. I've intentionally not responded to this, thinking that I was being a little harsh in my comments. But having now read and re-read it multiple times, it still makes no sense. Maybe I'm doing it wrong; maybe I should drink two fingers before I read it again so I can understand you.

You said:

"More units wouldn't necessarily translate into more kids; just more small(er) groups."

Seriously, does that sentence make sense to you? So a new "unit" (call it "B") forms and kids join. But these aren't "new" kids, according to your description, these are just kids that have come from other "units" (call them "A") so that now we have two groups, each of which is smaller. Am I reading that right? (I hope you can understand my exasperation at the way you express your thoughts.)

Maybe this is what you mean: Unit 'A' has 500 kids at tryouts and they contract just 80 to fill up their corps to the limit. The remaining 420 "cuts" go to the newly-formed Unit 'B' and they contract 150 kids to make their limit. The remaining 270 'cuts' go to newly-formed Unit 'C', which is an Open Class corps, and 150 of them get a contract. The remaining 120 go home exhausted. In your logic, none of these are "more kids" marching even though we now have 2 new "units" filled with kids who, otherwise, without the new units, would have not marched? Jeesh, I just don't understand your logic.

Please, help me understand what you mean in just this one sentence (but, before you do, give me a chance to get home and throw back a couple of snickers, eh? And maybe you should have a couple yourself!).

After I'm good and loaded, I'll pick up where I left off in the rest of your post because there are about 3 other points there that make similarly-little sense.

[CCorps]

But "charity" is a tax designation that has less to do with the function of the organization and more to do with their financial needs.

I understand what you're saying and agree: the Blue Devils are not a charity. But that's just an academic discussion for your own mental stimulation because the tax code is less likely to change than DCI. :P

I did not mean original intent of the organization; I meant the original intent of the designation of 'charity' And whether you realized it or not you just proved my point that many youth non-profits legally game the system when applied to what the original intent was when the government first created the charity designation. A youth non-profit providing the service only to, gifted young musicians from across central New Jersey and Pennsylvania hone their skills as performers in a large orchestral group, as well as in chamber and quartet ensembles. They learn to work with others in pursuing common goals, and enrich all of our lives through public performances of classical music certainly is a non-profit youth situation; but common sense and original intent of the designation will also tell you it is not a youth charity. For it to be, in terms of common sense and original intent, a charity it would read, Providing services to underprivileged and disabled youth from across central New Jersey and Pennsylvania to engage in performances in both large and small musical ensemble. They learn to work with others in pursuing common goals, and enrich all of our lives through public performances of music. That non-profit situation would be, in the realm of common sense and original intent, a true youth charity.