UDA applies fo 501(c)3 status

The Urban Districts Alliance board of directors approved at its Dec. 8 meeting the filing of an application with the Internal Revenue Service for 501(c)3 status.

As a 501(c)3, UDA, which now operates as a 501(c)6 organization, will remain tax-exempt, but it will have additional options for funding, according to Bill Compere, UDA executive director.

"It allows individuals to make (tax-deductible) charitable contributions and also allows nonprofit and governmental organizations to make grants to the Urban Districts Alliance," Compere said.

Jan Horton, president and chief executive officer of the Community Foundation of the Ozarks and a member of UDA's board of directors, said 501(c)3 status will be a big benefit for UDA.

Horton also served on UDA's original governance committee, which determined at the time the organization began that it should be a 501(c)6.

"UDA, in its early days, (was) working off a business plan that was developed by someone who's no longer in Springfield. We did not realize (then) that we would be wanting to seek contributions from individuals who would want a tax deduction. We thought we would be funded by other sources, governmental sources ... there was a different scenario of how we would acquire the revenue needed to operate," Horton said.

But she said that because UDA has decided to seek charitable contributions from individuals in the private sector, it's important that the tax deduction be available.

"It is individuals who benefit from it. It's hard for a corporation to get a tax deduction ... I think contributions in kind are tax-deductible, but a corporation is not the same as an individual, and ... they do not get the same tax deduction," Horton said.

Compere said it will take four to six months for UDA's application to be processed and approved by the IRS, but in the meantime, the organization can operate as an interim 501(c)3 organization and therefore be allowed to accept charitable donations on a tax-deductible basis.

He said UDA will not conduct funding campaigns, but he is aware of interest from corporations and individuals who would like to make donations and receive tax deductions. Compere added that UDA will be in contact with those parties.

Compere, who is also a certified public accountant, added that UDA already meets many of the qualifications for a 501(c)3 organization, such as working with public buildings and public works, and combating community deterioration.

"We're doing a lot towards trying to upgrade the center-city area sidewalks and infrastructure, as well as encouraging people to invest in buildings down here (and helping) them get their historic designation, so they can do more investing, from an economic standpoint, in some of these older buildings," Compere said.

He added, "we're really not changing what we're doing any, we're just asking the IRS to acknowledge that we are doing those kinds of charitable activities that qualify us."

The primary source of funding for UDA now comes from fees paid by center city organizations.

"We do manage some activities, and we do get some funding from managing those activities, so support is from various different places, but none of them are charitable," Compere said.

He said the existing revenue sources will continue, but additional funds anticipated from charitable donations will enable UDA to expand its services to the downtown.

"It will just allow us to reach out a little further and do things," Compere said.

Horton added that 501(c)3 status will open the door for grants from charitable foundations, because private foundations are required to make grants or contributions only to 501(c)3 organizations.

She said one limitation that 501(c)3 organizations have and 501(c)6 organizations do not is that 501(c)3s cannot make contributions to candidates, and they cannot advocate votes for any candidates or issues.

However, Horton said, the UDA board did not feel that option was necessary.