BD Pro Percussion "Fatboy". Never been anything like it.

[Kamarag]

More likely it was structured more of a spin-off from BDPA (call me Schultz, I said!) in order for the massive marketing machine that is System Blue to be unleashed.

This is exactly what took place. It was outlined in a letter to the alumni, and I believe the term was "spun out of". This is a fairly common business occurrence in instances where a subsidiary or side project outgrows it's parent organization.

[exitmusic]

I'm not agreeing with his summation, but it's the other way around. SB provided BD with income. How is that possible? Because SB is a for-profit entity.

I think "System Blue income" is "income from the System Blue clinics provided by BDPA during the summer." If System Blue, Inc. took in the money from the attendees, it makes sense that BDPA would bill them for the services. If System Blue, Inc. didn't exist in 2013, then it makes sense for BDPA to call that income "System Blue income," just like they call bingo income, "bingo income."

[mingusmonk]

Non-profits don't exist to benefit society (does drum corps?). They are non-profit because most of their revenues are plowed back into their mission, whether they benefit society or not, and not used to enrichen owners or shareholders.

In fact, non-profit orgs are generally chastised for building up significant war chests of dollars not spent on their mission. I don't know anything about that occurring at BDPA, but I can steadfastly assure you that they have the best legal and business minds making such decisions.

While surely possible, I really don't think that Dave Gibbs "purchased" BDPA. More likely it was structured more of a spin-off from BDPA (call me Schultz, I said!) in order for the massive marketing machine that is System Blue to be unleashed.

A succession plan that allows smooth transition to another corps director (Eric) while still allowing the expertise learned by Gibbs & Co to flourish for the betterment of the org is one that is well conceived and executed. Seems like SB, BDPA, Gibbs and Co, and the new director are all winners here.

Remember that a for-profit entity (like SB) that contributes its earnings to a charitable org (like BDPA) gets the same tax benefit as any other donor. Profits made by SB selling equipment could be shuttled to BDPA or used to grow the taxable empire to support the corps.

Remember, I'm "I know nothing. I want to know nothing!" Schultz.

Or it could not have a concern with the charitable org. Other than having significant overlap in staff and personnel, they do seem to go out of their way to avoid using the term "Blue Devils" in their new marketing. Aside from referencing the experience of their team members of course. It could simply be a venture to make some folks some money. (Not that there is anything wrong with that).

Thanks Schultz. (There ... you happy now?! )

Edited January 29, 2016 by mingusmonk

[garfield]

I think "System Blue income" is "income from the System Blue clinics provided by BDPA during the summer." If System Blue, Inc. took in the money from the attendees, it makes sense that BDPA would bill them for the services. If System Blue, Inc. didn't exist in 2013, then it makes sense for BDPA to call that income "System Blue income," just like they call bingo income, "bingo income."

Yes, of course you're right. The summer clinic program has been run by SB for several years now even as SB was an operating division of BDPA.

[c mor]

"Section 501©(3) requires that your organizing document state your exempt purpose(s), such as charitable, religious, educational, and/or scientific purposes."

I think those benefit society, or particular segments of society.

[N.E. Brigand]

Non-profits don't exist to benefit society (does drum corps?). They are non-profit because most of their revenues are plowed back into their mission, whether they benefit society or not, and not used to enrich owners or shareholders.

In answer to the question I've put in boldface: yes. Like other n.f.p. arts and educational organizations, their existence is well described by a 1919 statement from the meeting minutes of the board of directors of a prominent arts organization in the town where I live:

"Let us first recognize that [the company] does not belong to you or me, or even to us as a group. It belongs to the community. It was dedicated at birth to this great, striving, thriving, struggling, multifarious, cosmopolitan city. We are merely its trustees and guardians, not its owners."

(Emphasis added.)

[besson57]

It's also possible for a non profit to own for-profit subsidiary company. I worked for a non-profit that spun off a business unit as for-profit, but still wholly owned the subsidiary.

[exitmusic]

It's also possible for a non profit to own for-profit subsidiary company. I worked for a non-profit that spun off a business unit as for-profit, but still wholly owned the subsidiary.

Possible, yes, but the unrelated business income to the non-profit can't raise any "tax evasion" flags. It's tricky to structure, but certainly possible.

[MikeN]

DCP - come to talk s##t about the corps that finished first or second, stay for the 501©(3) analysis!

(I kid - I actually like reading this stuff!)

Mike

[N.E. Brigand]

Possible, yes, but the unrelated business income to the non-profit can't raise any "tax evasion" flags. It's tricky to structure, but certainly possible.

You betcha!

I mean, UBIT-cha!