Why PCBL Affiliate Membership Has Been and
Still Is a Great Deal!
PCBL membership provides, among other things:
- being a coordinated and respected advocacy voice for public libraries in Pennsylvania
- hosting an annual Awards ceremony to celebrate excellence in support of public libraries
- newsletter and items of interest will be posted on the website
One other benefit stands out, perhaps because its value is the most easily quantified. It is the
- IRS 501(c)(3) umbrella tax exemption for “affiliate” members, with special focus on the annual filing of the group IRS 990 for all affiliates.
Whether umbrella or otherwise, IRS 501(c)(3) standing gives: (1) to the user’s donors, the right to claim a tax deductable contribution to charity; (2) to the user, affirmation of exemption from paying IRS taxes; and (3) to the user, the right to a PA sales and use tax exemption.
The easily quantified evidence of value for being under the umbrella has two parts.
First, Friends organizations arechoosing the affiliate category of membership either because it is the path of least pain, relative to getting and then complying with 501(c)3 on their own, or because their Boards have actually figured out the relatively low cost for the strong PCBL benefits.
Friend's groups use PCBL’s group IRS Employer Identification Number (EIN), and they are taking advantage of a PA Sales and Use Tax Certificate of Exemption. In 2010, the fee for the affiliate benefits is a mere $125, based on the differential between a membership fee for affiliated Library Friends, $75, and unaffiliated Friends, $50. Both categories alike enjoy all the other bulleted benefits mentioned above in bold font, and more.
The second and complementary point is that the cost for a Friends organization to act on its own is comparatively high. It includes a startup fee, for incorporation in PA and an IRS 501(c)(3)application, as well as an annual fee for preparing the required IRS 990 Return of Organization Exempt from Income Tax. That is in addition to the hassle of doing paperwork for each task. Here are the 2010 start-up fees avoided by being under PCBL’s umbrella, for only $75/year above unaffiliated membership.
- For a Friends organization to become a 501(c)(3) nonprofit corporation on its own, registration of Articles of Incorporation is required.
- A well known on-line facilitator for this service advertises a minimum charge, in the Economy class, of $139 + state fee.
- The PA state fee for registration of the Articles is $125.
- The on-line service will also facilitate the preparation of the 501(c)(3) application, charging $595 + IRS fee.
- The IRS fee for 501(c)(3) registration is $850 for a non-profit with gross receipts exceeding $10,000/yr over four years; otherwise, $400.
Summing all the up-front costs, and assuming more than a minimally functioning Friends fundraising organization, the fees total $1,709.
Now let’s consider the annual fee for filing an IRS Form 990. Whether or not a non-profit is required to file is subject to a normal gross receipts test, with a threshold of $25,000 (990-EZ) or $5,000 (990) [too complex for discussion here]. The National Society of Accountants biennial NSA Income and Fees Survey, 13th edition, 2009 – 2010, tabulated from responses from nearly 8,000 qualified tax accountants, reports an average IRS Form 990 preparation fee of $584.
The NSA did not make a similar determination for the Form 990-EZ. However, data from five accounting firms that offer their services online, and from one used by our own local library, suggest a minimum average 990-EZ fee of $365* [local library 990-EZ fee = $600]. So, whether using the IRS Form 990 or 990-EZ, the annual fee is well above $25, and in addition to the typical startup fee of $1,709 already mentioned.
That is why the PCBL service to affiliate members has been a great deal!
The 2011 affiliate membership is $125. We know that you will agree, that affiliate membership remains a great deal. An individual Friends organization cannot do better on its own! The table below summarizes the key points from above that support this conclusion.
||Year 2011 Cost
|501(c)(3) filing startup
| IRS Form 990 filing
|| $584 (NSA avg)
| IRS Form 990-EZ filing
| PCBL affiliate
|| $75 (full PCBL benefits)
* $584 x [Σn=1-6(Fee 990-EZ/Fee 990)]/6; Fee 990-EZ/Fee 990 range = 0.47 – 0.75
So, we encourage you now to please stay linked to our web site where the information that you need for the umbrella IRS Form 990 filing is posted. There, you will also find all the facts about the IRS Forms 990/990-EZ that have been presented here. We thank you for reading, and we are always ready to hear from you. If you have any questions please notify: Alicia Stine, Assistant Treasurer, or Carolyn Pfeifer, Executive Secretary, by calling 1-800-870-3858.