Can anyone explain NHRA?
 

I had another racer ask me this question today. I didn't have an answer for him.

First off, this is not a thread intended to criticize or bash NHRA, so I guess what we would like to know is this:

1. Who decides on who the board of director members are?

2. Why as dues paying members of NHRA, we have no voice in who the board members are?

3. Who actually "owns" NHRA?

4. If NHRA was to be sold, who would actually pocket the money?

I understand how a Sub Chapter S Corp. works, but trying to explain how whatever type of corperation NHRA is actually works is something I couldn't do. Since it is a "non-profit" corperation I assume that the profits left on the books at the end of the year are distributed to the board of director members as bonuses to clear the books. Am I wrong about this?

I thought I would throw this out to you all and see what kind of answers I get. Hopefully something in simple terms we could all understand.

Re: Can anyone explain NHRA?
 

Before this goes any farther,

JULIE: is a "not-for-profit corporation" the same as a "non-profit corporation," or, are the laws governing them different???

Explain that, if you have time, please.


Bill

Re: Can anyone explain NHRA?
 

Thanks for pointing that out Bill. When I re-read this I wondered if I used the right term or not.

Re: Can anyone explain NHRA?
 

A non-profit organization (abbreviated "NPO", also "not-for-profit") is a legally constituted organization whose objective is to support or engage



Whereas for-profit corporations exist to earn and distribute taxable business earnings to shareholders, the nonprofit corporation exists solely to provide programs and services that are of public benefit. Often these programs and services are not otherwise provided by local, state, or federal entities. While they are able to earn a profit, more accurately called a surplus, such earnings must be retained by the organization for its future provision of programs and services. Earnings may not benefit individuals or stake-holders[1]. Underlying many effective nonprofit endeavors is a commitment to management. Twenty years ago, management was a dirty word to those involved in nonprofit organizations. It meant business, and non-profits prided themselves on being free of the taint of commercialism and above such sordid considerations as the bottom line. Now most of them have learned that nonprofits need management even more than business does, precisely because they lack the discipline of the bottom line. The nonprofits are, of course still dedicated to "doing good." But they also realize that good intentions are no substitute for organization and leadership, for accountability, performance, and results. Those require management and that, in turn, begins with the organization's mission.

Re: Can anyone explain NHRA?
 

A"non-profit" has become a generic name for a tax-exempt organization. The profits earned in these organizations are not subject to income taxes. They have profits (or else they won't be in existance long), can own properties, most anything a normal business can do. If they have "unrelated business income" then those profits are subject to tax.

NHRA is a 501(c)(6) organization (IRS code section).An IRC 501(c)(6) organization is a membership organization characteristically supported by dues. While such an organization may receive a substantial portion or even the primary part of its income from non-member sources, membership support, both in the form of dues and involvement in the organization's activities, must be at a meaningful level (thus we all pay annual "dues"). There is no requirement that the members have any say in the operations. The original bylaws and articles of incorporation or association would outline how the board of directors is determined.

No one "owns" NHRA. Should the organization dissolve or be sold the assets would have to be distributed to a similar type organization. Again, the bylaws would clarify where these assets would go. Most states (in California it would be the State Attorney General's office) would have to approve a sale and distribution of assets to insure they did, indeed, go to their intended purpose.

The NHRA Museum is a 501(c)(3) organization, basically a charitable organization. Payments made to this entity would be tax-deductible. Payments made to NHRA are not.

Probably the largest and most successful 501(c)(6) organization is the NFL.

Re: Can anyone explain NHRA?
 

Julie the difference between the NFL and the NHRA is that the NFL management is accountable to the owners of the team. As far as I can figure out the board and top management of NHRA has no one to be accountable to. How are board members chosen?

Re: Can anyone explain NHRA?
 

There is no comparison to the drag racing of the sixties and the present day drag racing.

Re: Can anyone explain NHRA?
 

Greg,
I believe the directors are voted in by the sitting members. The members remain on the board until they quit, voted off or die.

The HD proxy statement contains a lot of information about nhra's finances. I'll try to post some of the financial statements from 05,06,07 when I figure out how to do it.

Besides giving/paying out a few percentage points of the money it brings in each year a 501(c)(6) must meet at least 7 characteristics to receive a "grant" of tax exempt status. The 7 characteristics are fairly broad but there are some very thorny issues that could trip any 501(c)(6) if they don't stay on their toes.

lots of easy to read stuff on 501(c)(6)
http:www.irs.gov/pub/irs-tege/eotopick03.pdf

Re: Can anyone explain NHRA?
 

dragraceresearch, And their response was...........nothing I bet. You post makes sense but we know that went out long ago.

Re: Can anyone explain NHRA?
 

dragraceresearch's posts have been removed. This topic is to important for people to be using a alias. dragraceresearch just joined Class Racer, and it looks like his purpose is to only hammer NHRA.

As everyone knows, I am a supported of NHRA and I have no problem telling members how I feel. I also understand that members need to express their opinion about NHRA even if they are not the same as mine.

I will not let members post about this issue on Class Racer without knowing who they are.

Ken Miele

Re: Can anyone explain NHRA?
 

Ken: I agree you with you, I have never like post by phony names

Re: Can anyone explain NHRA?
 

Yo Ken;
Am I allowed to post as Wally Booth,great great great great grandson of John Wilkes Booth?


Ed

Re: Can anyone explain NHRA?
 

And I thought the trip to Florida might help him. You know. Kinda get some of that Jersey air out of his head. But I guess not!

Re: Can anyone explain NHRA?
 

Yo Ken .........you got my vote .

Re: Can anyone explain NHRA?
 

Bruce,you did notice I was mellowed out there in Gainesville eh?How did you make out with the roadster you were going to look at?

Ed

Re: Can anyone explain NHRA?
 

Julie and Kelly,

Thanks for the explanation of what Non-Profit Organizations are, and to some extent, how they operate.

I am curious as to what kind of laws/rules/limitations exist that relate to the head of one of these non-taxed groups being paid a salary that is "over-the-top" large, or whether there IS any restriction on how much money the people in that position can pay themselves.

I'd think that that would be a prominent part of the governmental control that is relevant to the non-profit status.

Is it?

Thanks for any information...

Bill

Re: Can anyone explain NHRA?
 

Bill,

To my knowledge there are no limits on what compensation can be. With charitable organizations, there is a lot more scrutiny because donors are looking at how their contributions are being spent. Donors want their money spent on the charity's programs, not in administrative costs.

Every tax return filed for a tax-exempt organization has the salary & benefits of its officers itemized. So, whoever is looking at these things at IRS and elsewhere, sees what people are being paid. What they do with that information I have no clue. One thing not known in these forms is if the officers have a base salary only, bonuses tied to performance, etc. All we see is the end total of what they received.

Determining what is excessive compensation is judgemental at best, in my opinion. You have to take into account the person's experience, what they could get in the private sector for the same work, cost of living in the area, their job performance with the organization, blah, blah, blah. Add to that our personal feelings of what is too much (I live in California, a high cost-of-living state. I'm sure someone living in Nebraska would have a difference of opinion on what they think is a fair wage out here.) So much is subjective.

Re: Can anyone explain NHRA?
 

Ed,
Yes, you were very laid back down there.

Jack,
Did you get the record at Atco? Was it C/SA?

Re: Can anyone explain NHRA?
 

One other thing is that a Non Profit can own one or more For Profit businesses (taxable).

Re: Can anyone explain NHRA?
 

If this wording, or something simular to it was part of the tax codes back in the mid 50's then that could explain alot.

It was before my time, but I guess NHRA was originated as an idea to provide services that were viewed as being of public benefit. I'm not sure you could sell that idea today (then again maybe you could), but I guess it was easy to prove that what they were doing was something of public benefit back then. I would assume as long as the terms of the original charter were not broken in any way it would still be legal and valid up until today.

Bruce; thanks for the link to the IRS documents.

Re: Can anyone explain NHRA?
 

Thanks, Julie.
This is in no way a reference to NHRA, but from what you described, it (non-profits) sounds like a license to steal.

Just my 2-cents...


Bill

Re: Can anyone explain NHRA?
 

Bill
Google "list of non profit organizations" then take your foot out of your mouth.There are a few I don't agree with (ACLU for example) but there are MANY that do alot of good for people here and around the world.
One is the Paralyzed Vets of America.I've given to them in memory of my father in law who eventually became blind due to an injury during the Battle of the Bulge in Belgium.They sent him book cassettes
which helped him to cope.
Research something before you tap the keys on your computer.



Ed F.

Eed F.

Re: Can anyone explain NHRA?
 

Bill,
There is a common sense formula that the IRS uses to monitor the payroll of non profit, not-for-profit organizations. Some of these organizations have been in trouble recently for over payment to executives. Every year articles pop up in the DC papers about the IRS busting some of these corporations masqurading as a tax exempt organization. They busted one former big time political figure last year for running one out of her house with her children on the payroll. It just depends if the IRS gets around to looking into any specific "organization". If an organization survives an IRS audit then they are good. That's the only way to know for sure. Some of these organizations start out on firm ground but end up on the slippery slope because of mismanagement or by simply out living their intended purpose. Times change!

Ed,
I think Bill was referring to some of the border line tax exempt organizations. There are thousands of tax exempt organizations. The majority of them are doing great work.

Re: Can anyone explain NHRA?
 

Thanks, Bruce. That is precisely the sort of thing I had reference to. I am sure that the majority of tax-exempt organizations are well-meaning, useful companies, that have their tax-exempt status rooted in services that benefit deserving factions of society who might not be self-sustaining for one reason or another, using conventional business practices.

What I was referreing to was the loose, seemingly laissez-faire structure of the rules governing the top-level compensation that would seem to make it possible for anyone to form a "not--for-profit" business and eventually pay themselves a salary that was in no way commensurate with the work they do.

The way Julie described it, there seems to be little in the way of governmental oversight for riding herd on people like Tom ($700,000.00-a-year) Compton and his little buddy, Graham Light, who's been listed as a "part-time" employee" making almost half that.

Those are the kind of situations I had reference to; I should have made that clear. My apologies to anyone who was offended by my comment, but, I stand by what I said; if these bozos can milk that much $$$ out of an organization that basically is just a "Hot Rod Club", with no governmental oversight/regulation or input from the organization's members, then yes, these situations do sound like a "license to steal." At least, to me. Bruce did add some useful information that demonstrated that what I described is not always true, but they must not have gotten around to NHRA, yet...

I just can't think of a nicer way to put it. Looks for all the world to me, like a "license to steal."

Bill

Re: Can anyone explain NHRA?
 

Well said Bruce and Bill! Jim