garfield Posted January 26, 2020 Share Posted January 26, 2020 (edited) 9 hours ago, TwoValves said: "Also, a nonprofit cannot be sold. Again, without an ownership mechanism, it simply isn’t possible. If a charitable nonprofit winds down operations, the board of directors must distribute all of the nonprofit’s assets to another 501(c)(3) after all debts have been settled. Some other non-charitable nonprofit types, like 501(c)(7) social clubs, distribute residual assets proportionately to the existing membership." https://www.501c3.org/who-really-owns-a-nonprofit/ Interesting semantics discussion. You are correct, of course, that "fiduciary responsibility" can only be transferred, not "sold" (as in "re-titling" the business). But, imagine for a second that Varsity is interested in "buying" DCI to run as its own non-profit. And, let's say, that their offer includes fronting a 100% premium on 50% of the next 10 years' worth of current DCI payout while reducing the annual payouts to 25% of what they are now during that same 10 years. Let's say that those numbers represent each DCI member corps receiving $500,000 now in exchange for a lower payout over those ten years. And let's say that Varsity believes that they can both run DCI more "profitably" and grow it during those 10 years (paying out more to the member corps after 10 years) and earn cross-sale business with their other scholastic lines of support. If this type of fiction were to actually be agreed to by the member corps, DCI could, in fact "transfer" (sell for a "premium" [profit]) it's fiduciary responsibility to Varsity's new "owners" (for them to run as a non-profit) in exchange for remuneration under the deal. DCI most-definitely can be "sold" (granted, not in the strictest of semantics) for a "profit". The question is: What's it worth? Edited January 26, 2020 by garfield Quote Link to comment Share on other sites More sharing options...
George Dixon Posted January 26, 2020 Author Share Posted January 26, 2020 Cheer! got punked on SNL - a clear sign of success! If only drum corps could be so lucky 3 Quote Link to comment Share on other sites More sharing options...
garfield Posted January 26, 2020 Share Posted January 26, 2020 15 minutes ago, George Dixon said: Cheer! got punked on SNL - a clear sign of success! If only drum corps could be so lucky Yep, if only. Gosh, what a gold mine. Quote Link to comment Share on other sites More sharing options...
gak27 Posted January 27, 2020 Share Posted January 27, 2020 If the show is anything CLOSE to what I just saw in that SNL skit (which was hysterical, btw), I fear my brain might just rebel and leave my body were I to watch any significant amount of an episode... YMMV, obviously Quote Link to comment Share on other sites More sharing options...
mingusmonk Posted January 28, 2020 Share Posted January 28, 2020 (edited) On 1/24/2020 at 6:33 PM, Rylan said: I used to cheer in high school and a bit in college and I also love reality television. However, I couldn't even get through one episode. I even tried on three separate occasions to finish the first episode but just couldn't. Also, you mean to tell me that these are college students?! They all speak English at a third-grade level and make numerous ignorant statements. Worth noting that they are in the Community College division. 2 year schools. For one reason or a another each were not accepted at 4 year university cheer programs. Or at least, one that was a match for them. Edited January 28, 2020 by mingusmonk 1 Quote Link to comment Share on other sites More sharing options...
N.E. Brigand Posted January 28, 2020 Share Posted January 28, 2020 On 1/26/2020 at 10:58 AM, garfield said: Interesting semantics discussion. You are correct, of course, that "fiduciary responsibility" can only be transferred, not "sold" (as in "re-titling" the business). But, imagine for a second that Varsity is interested in "buying" DCI to run as its own non-profit. And, let's say, that their offer includes fronting a 100% premium on 50% of the next 10 years' worth of current DCI payout while reducing the annual payouts to 25% of what they are now during that same 10 years. Let's say that those numbers represent each DCI member corps receiving $500,000 now in exchange for a lower payout over those ten years. And let's say that Varsity believes that they can both run DCI more "profitably" and grow it during those 10 years (paying out more to the member corps after 10 years) and earn cross-sale business with their other scholastic lines of support. If this type of fiction were to actually be agreed to by the member corps, DCI could, in fact "transfer" (sell for a "premium" [profit]) it's fiduciary responsibility to Varsity's new "owners" (for them to run as a non-profit) in exchange for remuneration under the deal. DCI most-definitely can be "sold" (granted, not in the strictest of semantics) for a "profit". The question is: What's it worth? Sounds like you're talking about DCI hiring Varsity as an events management company. Yes? Quote Link to comment Share on other sites More sharing options...
garfield Posted January 28, 2020 Share Posted January 28, 2020 21 minutes ago, N.E. Brigand said: Sounds like you're talking about DCI hiring Varsity as an events management company. Yes? Well, in effect, yes. Possibly the negotiating position of Varsity is better than that of DCI. Quote Link to comment Share on other sites More sharing options...
TwoValves Posted January 28, 2020 Share Posted January 28, 2020 On 1/26/2020 at 10:58 AM, garfield said: Interesting semantics discussion. You are correct, of course, that "fiduciary responsibility" can only be transferred, not "sold" (as in "re-titling" the business). But, imagine for a second that Varsity is interested in "buying" DCI to run as its own non-profit. And, let's say, that their offer includes fronting a 100% premium on 50% of the next 10 years' worth of current DCI payout while reducing the annual payouts to 25% of what they are now during that same 10 years. Let's say that those numbers represent each DCI member corps receiving $500,000 now in exchange for a lower payout over those ten years. And let's say that Varsity believes that they can both run DCI more "profitably" and grow it during those 10 years (paying out more to the member corps after 10 years) and earn cross-sale business with their other scholastic lines of support. If this type of fiction were to actually be agreed to by the member corps, DCI could, in fact "transfer" (sell for a "premium" [profit]) it's fiduciary responsibility to Varsity's new "owners" (for them to run as a non-profit) in exchange for remuneration under the deal. DCI most-definitely can be "sold" (granted, not in the strictest of semantics) for a "profit". The question is: What's it worth? It's more than semantics. The IRS doesn't typically allow semantics to be a defense. Try getting out of an audit by saying "it's just semantics of how we moved that money." BTW - has anyone heard ANYTHING about Varsity trying to buy DCI? All that anyone has spoken of is them trying to acquire USBands, and possibly all of YEA minus The Cadets. The part of your fiction that would be a legal barrier is that first, Varsity would have to create it's own 501(c)(3) in order to "assume" control of the current NPO-structured YEA/USB. But why would they do that? They want to acquire it so they can make money from it. Their new NPO would never be able to transfer a penny of leftover revenue to Varsity. What motivation would they have to infuse cash into a NPO venture that could only ever flow one-way? I suppose it's possible that Varsity could make large contributions as gifts to YEA in exchange for a number of BOD seats - enough seats to give them control of the org. But again there would be the question of why? No officer of the org could personally benefit from the cash (as in you could not "buy out" current members by giving them money to resign) and incoming members from Varsity could not personally benefit in the deal either. Any infused money would stay in the NPO, and none could ever go back to Varsity at all. In fact, they could not even consolidate their operational resources to run the YEA/USB thing more efficiently. Any physical and human assets owned/employed by the NPO cannot be used in any way by a for-profit for their benefit. They could not, for example, run YEA/USB out of the Varsity offices, or have any part of Varisty operating out of YEA/USB offices. The co-mingling of the assets would likely trigger the loss of 501(c)(3) status. It's a very sticky, complicated case, for sure. Quote Link to comment Share on other sites More sharing options...
Jeff Ream Posted January 29, 2020 Share Posted January 29, 2020 20 hours ago, TwoValves said: It's more than semantics. The IRS doesn't typically allow semantics to be a defense. Try getting out of an audit by saying "it's just semantics of how we moved that money." BTW - has anyone heard ANYTHING about Varsity trying to buy DCI? All that anyone has spoken of is them trying to acquire USBands, and possibly all of YEA minus The Cadets. The part of your fiction that would be a legal barrier is that first, Varsity would have to create it's own 501(c)(3) in order to "assume" control of the current NPO-structured YEA/USB. But why would they do that? They want to acquire it so they can make money from it. Their new NPO would never be able to transfer a penny of leftover revenue to Varsity. What motivation would they have to infuse cash into a NPO venture that could only ever flow one-way? I suppose it's possible that Varsity could make large contributions as gifts to YEA in exchange for a number of BOD seats - enough seats to give them control of the org. But again there would be the question of why? No officer of the org could personally benefit from the cash (as in you could not "buy out" current members by giving them money to resign) and incoming members from Varsity could not personally benefit in the deal either. Any infused money would stay in the NPO, and none could ever go back to Varsity at all. In fact, they could not even consolidate their operational resources to run the YEA/USB thing more efficiently. Any physical and human assets owned/employed by the NPO cannot be used in any way by a for-profit for their benefit. They could not, for example, run YEA/USB out of the Varsity offices, or have any part of Varisty operating out of YEA/USB offices. The co-mingling of the assets would likely trigger the loss of 501(c)(3) status. It's a very sticky, complicated case, for sure. who says they want to run it as a non profit? let it bleed dry and buy the assets for pennies Quote Link to comment Share on other sites More sharing options...
garfield Posted January 29, 2020 Share Posted January 29, 2020 4 hours ago, Jeff Ream said: who says they want to run it as a non profit? let it bleed dry and buy the assets for pennies Doh! Quote Link to comment Share on other sites More sharing options...
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