From John Webber, WALLA, Phoenix, AZ
WALLA recently incorporated and secured 501©(3) status. The process is easy but not simple. (How’s that for a switch?) For this reason, it is imperative that an attorney be used who has knowledge of the process. From the membership figure, it would appear as though the group is from a populated area where such an attorney could be found. Further, from within the membership, there might be such an attorney, or one that would know of such. If there are a number of candidates, check to see if any would do the work pro bono or for a reduced fee. WALLA’s process went quite smoothly because we had good people working on it. In fact, we received our 501©(3) approval in less than three months.

From Sharon Simpson, Senior University, College Park, MD
A good source of volunteer assistance is SCORE (Senior Core of Retired Executives). You can locate them through your Chamber of Commerce.

From Norm Bennett, Institute for Continued Learning, Young Harris, GA
Incorporation doesn’t necessarily protect LLI officers or board members from litigation.

From Ann Petersen, American University, Washington D.C.
We are indeed incorporated as a 501 (c)3. Although we were founded within American University in 1982, we separated from them in 1989. The original incorporation was in Delaware for tax reasons, but it was switched to D.C. for reasons I'm not sure of..I can dig a bit deeper into the files if you care about this. We now operate under a Memorandum of Understanding with American University which allows us to use the words "Affiliated with the University" on all our publications and advertising. We used to report to the Dean, Continuing Education and Special Programs, as our campus contact; at the moment we report to the Asst. Provost due to some administrative re-organization on campus. We rarely talk to them though, and have kept them at a long arms length over the years. This is actually something I am working to reassess this year, to look for areas that would be mutually beneficial. My office is on campus but we pay rent for the space. Our program is held in a church building next door to the campus and a few hundred feet from my office. We rent the educational wing of the church Monday - Friday with classes beginning at 10:00 a.m. and ending at 3:30 p.m.. We do not have evening classes. In order to provide a financial cushion after the separation from the college, the LLI engaged in an Endowment Fund drive and collected $75,000. We use the interest on the investments as needed. We also had a major donation five years ago from one individual which allows us a bit of flexibility. Our annual membership dues are $285. We have one full time and one half-time paid staff; everyone else is volunteer. The actual process of incorporation is in our files, but that information is 12 years old now. I would be happy to dig around in there is if would be helpful. Perhaps I could be of more help if I spoke to the director of the LLI in question to chat about "life on the outside" of the college.

From Dolores Weiman, LIR, Jefferson City, MO
Procedure for applying for 501 ©(3) non-profit status: Apply to your Secretary of State office for the Domestic Non Profit Instruction Sheet. This will give you a long list of requirements for you to complete such as - Name of Corporation – type of corporation (a public benefit corporation – You will need an "agent." Our office manager serves this position as she receives all mail. You will need to determine how assets will be distributed if the LLI is discontinued. The Purpose of the Organization as well as other obvious questions such as membership, classes, trips, etc., will need to be decided. In Missouri, an organization with this standing cannot participate in political activities. When this form is completed and approved, one can then apply to the Internal Revenue District Director for "Application for Recognition of Exemption Under 501 ©(3) of the Internal Revenue Code." Again, you will receive a long list of questions regarding the LLI’s operation. Examples – Descriptions of all your activities, copy of newsletter, schedule of membership dues and a copy of the membership application. None of these are difficult, just time consuming. The important thing at this point is to have all financial records and history up-to-date. AND, to have a CPA on board to help with that. It is also good if you have a lawyer in the group to assist, although we did not really run into any difficulties. The process can be long. Expect delays and check back to track what is happening. The following forms were required as we sent final papers to the IRS. Form 1023, Application for Recognition of Exemption Copies of Articles of Incorporation Corporation By-Laws Form 8718 and a CHECK Form 872-C filed in duplicate, Form 2848 Power of Attorney Certificate of Incorporation 10. At the end of this process you will be on probation for three years with the IRS.

Original Query from Roger Kessel, Academy for Lifelong Learning, Cape Cod Community College, MA
1. Was your LLI able to qualify as a school for 501(c)(3) purposes and, if not, what type of organization did your LLI qualify as to avoid private foundation status?
2. Did your LLI file historical financial statements or projected budgets or both in connection with its application for exemption recognition?
3. Were any questions raised by the IRS or others as to discrimination given a mission to serve the senior population or restrictions limiting membership to those over a specified age, for example 50?
4. In your LLI's application did it request an advance or definitive ruling? As you can see all of the above relate to our application to the IRS for 501(c)(3) recognition. Thank you.

Another Similar Query from Stew Engel
Thanks for your prompt response. I've looked into it some & can see that the 501(c)3 part is easy. What I'd most like to know is why you incorporated (if on a lawyer's advice, why did he advise it) & how much it cost. Seems to me that if you are using college property to hold your classes you would not have a liability problem to worry about. I appreciate your help.

Responses From John E. Manion, Lifelong Learning Institute of N. Virginia, Annandale
Our LLI qualified as a Sec 501(c)(3) organization by submitting to the Internal Revenue Service the required Form 1023 Application for Recognition of Exemption. Based on the application we were granted a favorable advance ruling which ran for five years. An advance ruling period is normal procedure in granting exemptions, we understand. At the end of the five-year period (June 2000) IRS requested a report Form 8734 from us to determine if the exemption would continue. The report was submitted and accepted by the IRS. We submitted only the financial information required by the Form 1023. No questions were raised relative to discrimination.

From Shirley Stone, Guild for Learning in Retirement, University of Wisconsin-Milwaukee
We receive our nonprofit status as part of the university. It is possible to obtain your own 501 (c) (3) but it is an arduous process and should involve a lawyer. It would also be necessary to file taxes yearly. It would be far simpler to have the university provide this. Good luck!

From Dick Di Vecchio, Lifetime Learners Institute, Norwalk Community College Norwalk , CT We have such status and we're looking for documentation to forward to you. Incidently, it isn't such a big thing to get. And it isn't a big thing to maintain. Should have the info shortly; I'll forward as soon as possible. Most of the rest of your answer is coming. While we do have college insurance coverage, we also have our own. The primary reason for that is that on college property we're covered by our college insurance, but off the campus (we have classes at other sites), and for other various off-campus activities, such as member trips, conferences, meetings, etc., the other insurance takes over. Here are the rest of the answers:

1. We are a Section 501(c) corporation. We qualified because we..."normally receive not more than one-third of (our) support from gross investment income and more than one-third of (our) support from contributions, membership fees and gross receipts from activities related to (our) exempt functions."
2. Our treasurer does not think qualifying as a school is a good idea because of the many additional     requirements that have to be met.
3. When we initially filed, we filed one year of actual figures (all we had at the time of filing) and three years of forecasts.
4. There doesn't appear to be anything wrong about serving only a senior population. We had to give them (IRS) a copy of our bylaws which gives our reason for being in the preamble (as I recall). Incidentally, whenever we make a change to our bylaws, we send a copy to the IRS because according to our understanding, this is required.
5. We requested an advance ruling and received it. It is not possible to get a definitive ruling until you have been in operation a certain period of time (we think five years, but that should be simple to check). So first you get an advance ruling; then when the period is up, you'll give them your annual statements and any additional statements they require and you should get a definitive statement. In addition to the above, here are a few more statements you may find useful:
6. You generally cannot maintain a bank account for an organization unless you have documents permitting you to do so. A corporate entity allows that function.
6a. Plus, a corporate entity provides financial cover for officers and board members (The Volunteer Act not withstanding).
6b. We also felt a corporate form was more compatible for us because we perform all our own functions, including collection of dues and fees, curriculum formation and instruction, mailing, etc. (We also have our own non-profit mailing permit.)
7. No one seems to remember how much it costs in the State of Connecticut to incorporate, and even if we did, it's probably changed. It can be checked pretty easily.
8. The fee for the IRS was about $150, again that may have changed and can be checked fairly easily.
9. Lawyer fees would vary we suppose, but the best bet would be what we did. Have a lawyer do it pro bono. If you have someone in you group who is a retired attorney, I'd ask him or her.
10. Our college requires any organization using its space to have liability insurance. We have a million dollar policy which costs us $250 per year.
11. Our treasurer answered a question, which nobody asked. The question: Would your group prefer to handle your own financial affairs or let your sponsoring college do it? The answer: It isn't even close! Do it yourself!!!!! I hope this gives you the answers you need.

From Silvine Hudson, Retirement Learning at Vanderbilt University, Nashville, TN
We at Retirement Learning at Vanderbilt did not apply for separate 501 C 3 status. We are an integral part of the University. It is our banker, underwriter, and everything.

From Roger Kessel, Academy for Lifelong Learning, Cape Cod Community College, MA
We are proceeding ahead largely because of a serious shortage of space. The key driver is our desire to obtain more classroom space and ideally at some point our own building on or, if necessary, off campus. The College or its umbrella organization, the State University System, will not enter into any binding agreements with us, however, unless we create a legal entity (in contrast to our present informal association status) with which it can contract. The second reason is to create a 501 (c)(3) corporation under the internal revenue code so that any contributions to our effort will be tax deductible. We will definitely open up our own bank accounts so that we can directly manage our own finances and not be subject to the protocols of others. These items viewed collectively all point to greater independence and greater control over our own destiny. There are, of course, disadvantages - not the least of which are increased efforts and costs to administer a corporate entity which, among other things, must make annual filings with the State and the IRS. Please do not hesitate to e-mail again if you would like more detail or additional information. As you know the issue of incorporation could be discussed endlessly and I want to honor your request to be brief.