Table of Contents:

Incorporation
Internal Revenue Service Tax Status

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Incorporation
It is imperative that each Sertoma club incorporates for the protection of its members. It is comparatively simple to form a nonprofit corporation in most states, and a lawyer member of the club will be glad to draw up the papers.

A Sertoma Club, will incorporate, under the name designated in its charter, such as ‘Sertoma Club of...’ and such Club shall agree, as a condition precedent to incorporation, that it will, as an incorporated body, abide by requirements of Charter.

Notification of incorporation is to be given to the Executive Director at Sertoma Headquarters for the permanent record.

Internal Revenue Service Tax Status
It is important to understand that Sertoma and its clubs hold tax status as a 501(c)(3) organization. This is an important issue, as one of the primary responsibilities of both Division and club leadership is protecting the tax status of the clubs. The following is a brief explanation of the tax status of Sertoma, and its clubs.

Sertoma also holds an incorporated 501(c)(3) tax status under the name of the Sertoma. This status is provided to organizations that are exempt from federal income tax for charitable purposes. Donations made this type of entity are considered tax deductible to the fullest extent of the law. They may, if they desire, establish a fund, separate and apart from their other funds, exclusively for religious, charitable, scientific, literary or educational purposes, fostering national or international amateur sports competitions, or for the prevention of cruelty to children or animals. These funds must be organized in such a manner to prohibit the use of the organization’s funds upon dissolution, or otherwise, for the general purposes of the organization creating it.

Sertoma extends this exemption to all clubs in good standing. Each year, Headquarters provides the IRS a specific list of clubs that have the privilege to operate under these umbrellas. To qualify beyond being in good standing, each club must have a EIN number registered with the IRS for the (c)(3) exemption. This number must also be reported to Sertoma Headquarters. The Finance Department at Headquarters can assist you in acquiring these numbers.

It is important to keep in mind that much of the revenue generated through fundraising events is not tax deductible as a charitable contribution. Clubs should be aware of those limitations and the reporting requirements when they accept gifts that individuals will declare as deductible on their tax returns. If you have specific questions or concerns, your Sertoma Headquarters staff is available to help.

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