Motorized Trail Foundation Placed on Hold

During the NOHVA Annual meeting, there was extensive discussion concerning the progress of the Nebraska Motorized Trails Foundation.  Business Manager Dan Nitzel reported that he had spent about 80 hours in the last month alone continuing to develop the project and it is now at a stand still.  The 80 hours last month were in addition to the countless hours spent on the project over the last couple of years. 

The idea behind the foundation was to create a separate non-profit charitable IRS approved organization tied in with the NOHVA organization.  A committee in charge of the administration of the foundation would be appointed by the NOHVA Board of Directors or elected by the NOHVA membership.  These types of organizations or foundations are referred to as 501c3 organizations. 

The new organization would be called the Nebraska Motorized Trails Foundation (NMTF) and it would provide a funding mechanism to:

> Fund existing ATV and dirtbike projects

> Fund new projects

> Fund events for ATV and dirtbike riders

> Fund administration of new and existing ATV and dirtbike organizations. 

We were hoping to attract tax deductible donations and grants from individuals, from corporations, government agencies other foundations.  

Individuals and groups who contribute to the foundation could earmark what projects they would like to benefit, or allow the committee to decide where to spend their contributions.   NOHVA planned to fund the formation of the foundation and as mentioned earlier, the management committee would be appointed by the NOHVA Board of Directors or elected by the NOHVA membership. 

At first we investigated forming our own foundation.  We determined that it would cost us about $1500 to $2500 to hire an attorney to complete the paperwork.  Then we found an accountant who said he had experience in these types of organizations.  Just before we expected our accountant to begin on our project, he came into a mid life crisis, got fired from his job and left town to parts unknown.  So our business manager decided to see if he could do it himself. 

Along the way we thought we found what we thought would be an easier way to get the job done.  After some investigation, we discovered a group here in Nebraska that may have been able to help us, and we decided to try to become associated with the Nebraska Community Foundation.  The Nebraska Community Foundation was established with a grant from the Lied Foundation to assist communities and other groups to help them find ways to obtain tax deductible donations from various parties and individuals. 

However, after completing the applications and prior to submitting the paperwork and payments to the Nebraska Community Foundation staff, we thought it would be a good idea to submit a plan to the Nebraska Community Foundation detailing how we planned to manage the donations and detailing what kind of projects we would like to have the donations distributed to. 

After mailing a copy of our plan to Nebraska Community Foundation staff, and after re-contacting them several times about their decision about our plan, we have had no response back from them.  They have not even an acknowledged that they received our documents.  Thus it can be assumed that our desire to establish a motorized trails foundation in association with their foundation does not seem to agree with them.  So, it’s back to square one, once again, this may be a good thing.

Dan Nitzel also reported that he asked people involved with organizations like NOHVA across the nation about their experiences involving establishing a 501c3 organization.  The request was made through the National Off Highway Vehicle Conservation Council (NOHVCC). 

A wide range of responses were received back to us.  Organizations across the nation reported that the paperwork to obtain a 501c3 was extensive and for the majority, the benefits generally seemed to be insignificant.  However, a few groups greatly benefited from the 501c3, especially in states that allowed 501c3 organizations to apply for Federal trail funds using the Recreational Trails Program.  Currently, the state of Nebraska does not allow this option in our state at this time, so in this case we would not benefit from a 501c3.

Granted there are benefits from being an official 501c3 IRS approved tax exempt organization as  501c3 organizations often apply for funding from other organizations and businesses. However, the applications for the grants are extensive at best, and thus require a CONSIDERABLE amount of time and energy.    

This leaves us with the question, would we benefit from becoming a 501c3 organization considering the monetary cost to become a 501c3, the cost for booking keeping and the considering limits that would be imposed upon us?  From our understanding, 501c3 organizations cannot participate in political activities and lobbying, and there are strict guidelines on how charitable funds can be used.  Then there is the possible screening (audit) of personal finances by the IRS of those individuals involved in operating the 501c3 organization. 

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This page was updated on Monday, February 19, 2007