The Links Foundation, Inc. Newsletter, Number 2, May 1992 Page: 3
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The Foundation President, Chief Administrative
Officer, the Director of The Foundation, and our
Strategic Planning consultant have met with lawyers
well-versed in nonprofit and Foundation affairs.
Preliminary findings/conclusions are that we can
take one of three routes, organizationally. There
being no IRS threat with either alternative. We
can use the Foundation as the fundraising arm of
The Links, Inc. At present, the two organizations
are in competition. We still have questions to ask
of the lawyer.
After considerable study of our options, discussion and
consultation with two law firms, it is recommended
that we make The Links Foundation simply a vehicle
for restricted funds.
The advantages would be that this would take us back
to the original intent of the Fund/Foundation. It
would eliminate competition between The Links, Inc.
and The Foundation, Inc. We would not need to fees
apply for a new 501 (c) (3) tax status. No membership
would be required. Every Link would automatically
have a vested interest and "membership" in the
Foundation. We would have one Consolidated Board
(The Executive Council) with a Fund Development
Committee until such time as it appears appropriate to
move to separate boards. Money would be saved
because of elimination of duplication of meetings,
newsletters, brochures, membership cards, etc. These
monies could be used for much needed staff. We
would continue to use the Foundation as a receiver
and disburser of funds for charitable purposes. The
Foundation would continue to be the philantrophic
"arm" of The Links Inc. Chapters would still be able
to use the Foundation for their restricted funds, thus
receiving the tax advantage. Less extensive book-
keepingwould be required for unrestricted funds. The
Foundation would be controlled by The Links, Inc.
The only disadvantages would be that there would
need to be an increase in Grants-in-Aid fees to offset
the discontinuance of former membership fees, so as
to provide necessary funds for administration, and a
significant effort may be needed to amend existing
Articles of Incorporation and Bylaws.
The advantages far outweigh the disadvantages,
therefore, it is the consensus of the Joint Task Force
that the above plan be adopted.
S Questions and Answers
STEPTOE & JOHNSON
(Bruce R. Hopkins)
Question: Could the program activities that are
presently being conducted by The Links, Inc. and The
Links Foundation, Inc. be conducted by one combined
Answer: Yes, however, the organization must have a
501 (c) (3) tax status.
Question: Can a 501 (c) (3) organization do any
Answer: As I understand it, The Links, Inc.'s lobbying
activities are within the ambit of "insubstantial"
activities and thus permissible for a 501 (c) (3)
Question: Some Links might prefer to retain both the
501 (c) (3) and 501 (c) (4) tax status. What
advantages would there be for doing this?
Answer: I'm not sure why The Links, Inc. would want
to retain two tax statuses. There may be "political"
reasons that I don't know about. However, it may be
important to use the name "foundation" in that
sometimes individuals who pay dues to an entity do
not envision the same entity as being a "charity" and
that an organization bearing the name "foundation"
may appear as being more "charitable" than one that
Question: If The Links, Inc. wanted to have one
organization, what would be the best way to do it?
Answer: The best way would be to attempt to procure
501 (c) (3) status, The Links, Inc. and the Foundation
could be merged into it.
Question: Would it be possible to change The Links,
Inc.'s tax status to 501 (c) (3)?
Answer: It is possible to request a change but my
experience is that the IRS only reluctantly, and after
great effort, alters the tax exempt status of an
organization from a "noncharity" classification to that
embraced by IRS 501 (c) (3).
Question: How can The Links, Inc. keep control of
Answer: There are several ways The Links, Inc. can
keep "control" of the Foundation. One approach
would be to have The Links Foundation be the
fundraising "arm" of The Links, Inc. so that all
program activities would be conducted by The Links,
Inc. with some of them funded by the Foundation.
The principal way The Links, Inc. can be certain that
it will not lose control of the Foundation is by having
the ability to appoint and remove at least a majority of
the Foundation's directors. This is the control
mechanism known as an "interlocking directorate."
Some of the Foundation directors could be in that
position by having stated positions in The Links, Inc.
(ex officio directors) and/or The Links, Inc. board
could have the authority to appoint and remove some
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Links Foundation. The Links Foundation, Inc. Newsletter, Number 2, May 1992, periodical, May 1992; (texashistory.unt.edu/ark:/67531/metapth305961/m1/3/: accessed August 14, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting UT San Antonio Libraries Special Collections.