Non-Profit status of The ACMNA
Although ACMNA is incorporated as a 501(c)(3) and qualifies as a nonprofit organization, it is not a charitable organization in the eyes of the IRS. That means cash contributions to ACMNA supports the good work it does, but cannot be claimed as a charitable deduction on your taxes. The ACMNA Board is considering, but not yet ready to apply for IRS recognition as 'charitable" because we recognize that would mean limitations on activities. However, we are making the Bylaws revisions at this time so we will be prepared for our filing of IRS form 1023 in the future, if we so decide.
A charitable organization may not devote a substantial part of its activities to (1) propaganda or otherwise attempting to influence legislation, or (2) any political campaign on behalf of any candidate for public office. ACMNA has never participated in political campaigns, nor does it intend to. That leaves the “influence legislation” restriction. In other words, political action within charitable organizations is restricted.
The real question is whether ACMNA attempts to “influence legislation.” It does oppose requests for zoning variances deemed detrimental to the neighborhood, occasionally appearing before a Zoning Administrator, a Board of Adjustment or a Planning Commission. Those appearances probably wouldn’t be considered influencing legislation. From time to time, however, zoning issues may be resolved at the Phoenix City Council level. If ACMNA took a position on a zoning matter before the City Council, that might be considered an attempt to “influence legislation.” So long as those appearances, or funds expended on such an issue, are not a substantial part (over 20%) of the Associations activities, it should not jeopardize ACMNA’s charitable designation by the IRS.
The Board is carefully considering this issue and its ramification. We have operated successfully since 1987 without being classified as a charitable organization by the IRS. However, recent proposed developments in and near our neighborhood have caused considerable controversy, and the Board has sought legal advice on certain matters. Those expenses impact cash available for other Association activities and charitable involvements. The Board is considering whether being qualified by the IRS as a charitable organization would increase contributions, and allow the Association to do more for the general good of the neighborhood, such as supporting neighborhood sports, art centers, parks or street beautification, schools, or even scholarships like we've done in the past.
The proposed updates to the by-laws and the articles of incorporation are intended to prepare for the event that the Board might seek IRS charitable recognition at some time in the future. Those updates occurred in the vision, mission, and purpose statements, and include limitations on activities to comply with IRS requirements.
Additionally, revisions were made to: extend the term of board members from two to three year, with a maximum of nine years of service (down from 10); clarify the requirements for Board membership and the nomination process for Board members so nominations must be received by the secretary; require motions or resolutions to be presented at the Annual Meeting to be presented to and reviewed by the Board in advance so we have an orderly general meeting.