THURSTON COUNTY'S HIDDEN SECTOR

Football and non-profits

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This is a busy week! With the Super Bowl and Olympics not to mention the NBA, NHL, and NCAA in full force as well as the MLB contract talks (not going well) it's hard to focus on other things like this column!

Lucky for us, as always, there is a nonprofit connection.

Last week, once again, Forbes named the Dallas Cowboys as the most valuable sports franchise. According to Forbes, the Jerry Jones team is worth $6.5 billion, which is not a bad investment considering Jerry Jones bought the Dallas Cowboys for $140 million in 1989. (Full disclosure: I worked with Jerry Jones in the past, and he is everything you see in the media).

Given the enormous revenue generated by sports teams, it is hard to believe that a sports franchise could be a nonprofit, but there is at least one.

Go Pack Go! – a Nonprofit!

According to the history of the Green Bay Packers, the Packers have been a publicly owned, nonprofit corporation since 1923. Initially founded by Curly Lambeau in 1919 (hence the stadium name), after several financially difficult years, the team was incorporated as a nonprofit corporation, with local fans contributing five dollars each for a share in the team.

The Packers are a unique franchise in the National Football League. The team is owned by the local people and run by a president.

The corporation currently has approximately 361,300 stockholders who collectively own 5,009,400 shares of stock. (Full disclosure: I am a shareholder in the Green Bay Packers.) There have been six stock sales; the current sale continues until February 22.

According to the Green Bay Packers, if you do buy stock in the Packers, the one thing to keep in mind is that your share is essentially worthless. Although you're technically a part-owner of the team (which is cool to brag about), that's about all you're going to get from your stock (that and the ability to buy official Shareholder merchandise).

The shares don't appreciate, can't be traded, and do not pay any dividends. Also, buying a share doesn't allow you to offer input in the team's decision-making process. (Like whether they should keep Aaron Rodgers after the 2021 NFL season).

NFL – Not a Nonprofit?

Speaking of the NFL, you may be surprised to learn that until 2015, the NFL was a tax-exempt, nonprofit organization. In 2015, the NFL announced that it would voluntarily give up its tax-exempt status which it had since 1942.

Like the Packers, the NFL was struggling financially and successfully filed for tax-exempt status with the IRS early on. The IRS ruled that the NFL was a trade association for the individual teams and was therefore exempt from taxes under section 501(c)(6) of the tax code.

Not surprisingly, tax-exempt status was good for the NFL, so why voluntarily relinquish this benefit?

The NFL's tax-exempt status had become increasingly controversial, and, in the end, the NFL decided that it was no longer worth it -- calling the issue a "distraction." Don't feel bad for the NFL though; in exchange, they will get a few benefits, including the end of federal disclosure requirements, which means the NFL no longer has to disclose its income or the salary of its Commissioner.

While we are talking sports, it is also good to note that the International Olympic Committee is a non-governmental sports organization or NGO as nonprofits are known outside the United State.)

Credit Unions – Also Nonprofits

Are there other organizations you might be surprised to learn are nonprofits?

The answer is yes, such as credit unions. Banks and credit unions have many similarities, they both offer many of the same services, but the main difference is that shareholders own banks while credit unions are always nonprofit organizations because their members own them.

While a credit union's structure is different from that of a bank, it's also different from most other nonprofit organizations. Unlike other nonprofit organizations that are completely tax-exempt, credit unions do pay state, local, property and payroll taxes.

Also, while it is common for employees of nonprofit organizations to make a smaller salary than those who may do the same work in a for-profit corporation, credit unions usually pay their employees a larger salary than bank employees.

The Good, the Bad and the Ugly Nonprofits

You may be asking yourself, aren't all nonprofits "good" and meet a community need with their mission? The quick answer is not necessarily. I won't list organizations whose stated mission is unethical, immoral or promotes racism and bigotry but those organization do exist as nonprofits. According to the Washington State Secretary of State's Office, an organization may be considered a "nonprofit" if:

  • It is formed under the Washington Nonprofit Act
  • It qualifies as a nonprofit for federal tax-exempt purposes
  • It is a religious (church, mosque, temple) organization, charity, or benevolent organization. (there is significant leeway with this)

Remember, there are 23 different designations for a nonprofit organization besides 501c3 which specifically denotes an organization formed for a "charitable purpose." A nonprofit organization may be created as a corporation, a trust, or an unincorporated association and might or might not qualify as charitable. By forming a nonprofit, the organization's founders agree to operate for a purpose other than making a profit.

What can you do?

If you want more information on the legitimacy of a nonprofit organization, go to Charitynavigator.org for more information.

Soliciting your ideas

If you know of a nonprofit that is doing something great, celebrating a success, needs some outstanding volunteers or hosting an event, let me know! This column (aside from a little education) celebrates nonprofits!

Mary Beth Harrington, CVA (Certified Volunteer Administrator) lives in Tumwater. She travels the country speaking at conferences and to individual organizations articulating issues facing nonprofits. Send your ideas to her at  MaryBeth@theJOLTnews.com

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