Legal Status Survey Analysis

One of most interesting things about getting to know the different CWRTs is that many do not have formal organizational structures, no elected leaders, no dues and some don’t even have members. So, we decided that it would also be informative as to the prevalence of 501(c)(3), nonprofit organizations versus all the others.

• It is important that leaders of 501(c)(3) CWRTs continue to tell their members that they are eligible to receive tax benefits by virtue of their membership in the CWRT.

• It is incumbent on CWRT leaders to make decisions from a basis of knowledge, rather than conjecture. Suggest looking into the costs for filing, the tax return requirements at the end of each fiscal year and the likelihood that a small nonprofit will be audited.

• Corporate versus individual liability is a very real benefit to becoming a registered nonprofit. Whereas officers can be sued with judgements against their personal assets for unincorporated organizations, in most cases only the assets of the CWRT can be targeted for incorporated organizations.

• The reasons for not becoming a 501(c)(3) may seem compelling if everything in the future remains as it has been in the past. However, when CWRTs hold meetings in another’s facility or go on field trips and a catastrophe should occur, leaders, tour guides, drivers or others may be in a position to lose their homes, future earnings, etc.

• As one respondent pointed out, it is also important to seriously consider purchasing both General Liability and Errors & Omissions insurance to further protect members. Note that these two insurance types cover different risk exposures.

• General liability insurance covers: (Non-employee bodily injuries on your commercial property; Damage you caused to someone else’s property while carrying out your work; Advertising injuries (slander, libel, copyright infringement, misappropriation, etc.)

• Errors & omissions insurance covers: (Negligent professional services; Failure to meet contractual obligations; Failure to uphold a certain standard of care; & Errors or oversights)