Re: IRS - AERC Bylaw Change

["Mike Sofen" <miksof7@gte.net>]

I can tell you from direct experience, having been inside the books of 100+
companies (as a software developer, not as an accountant), that there is a
distinction between how companies view contributory funds and advertising
dollars.

Advertising comes from budgeted expense accounts and is spent SOLELY to
generate revenue for the company.  Thus the company that sponsors an event
by purchasing advertising (directly or indirectly) is intending that the
advertising bring new customers and revenue to their doorstep.

Contributions, on the other hand, can come only from the pool of profit
dollars in the company's coffers.  Put another way, a company that is
breaking even or losing money will not tend to be donating cash or goods to
another entity.  A company that is doing extremely well has many incentives
to donate to non-profits - the implied goodwill, the assistance to local
infrastructures, and yes, the reduction of corporate taxes.

I know for a fact that Microsoft donates millions of dollars in software and
cash every year.  This is not advertising expense, these are donations to
qualified entities, SOME of which are not 501C3 organizations, like public
schools.  You can rest assured that all of these contributions are deducted
at tax time, so unless the AERC is classifying itself as a public school, it
will attract far more discretionary funds by retaining 501C3 status, in my
opinion.

Mike Sofen
Seattle, WA

-----Original Message-----
From: K S Swigart <katswig@deltanet.com>
Date: Sunday, October 11, 1998 8:54 PM
Subject: Re: IRS - AERC Bylaw Change



It would be an error to assume that "major corporations" and other
sponsors are willing to buy advertising only from 501(c)(3) corporations.
I can name a host of them that regulary buy advertising from NBC.

And any reputabe controllerr for a "major corporation" or any competent
acountant for just about any other company would have no difficulty in
justifying to the IRS that "sponsoring" awards for the AERC and all the
attendant publicity associated with doing do could reasonably deducted as
a legitimate advertising expense.

So, though the AERC may no longer be able to solicit tax-deductible
donations...it can still sell advertising.

And don't tell me that no major corporation does such a thing.  I have
been to countless local endurance rides who have garnered sponsorships for
their awards from a wide variety of companies...from the local tack shop
to Coors Beer. And I know for fact that at least SOME of these rides are
not 501(c)(3) organizations...can't speak for all of them, but I would be
surprised if any of them were.

The statement from the "guest" about no major coporation making
contributions to anything other than 501(c)(3) organizations is just so
much horse shit.

And I am not so jaded that I don't think that even individuals (who can't
expense their "promotional" expenses) would be unwilling to make donations
to the Convention Raffle/s, or buy raffle tickets if they couldn't write
it off their taxes.  I have made donations to this myself, AND bought
raffle tickets, but have never had my bookkeeping together enough to
actually get the expense down on the right tax form (and, yes, _I_ can
write it off as a business expense).  This doesn't keep me from making
contributions.

Let's hear it, how many people actually DO deduct their contributions to
the AERC????

kat
Orange County, Calif.