<VV> Scholarship

[John Dozsa]

James Rice wrote:
> 
> ALL:
> 
SNIP ....
> 
> 4. I hope the following will answer the question a couple folks have posted
> about why CPF has a scholarship program.  And please note, as Tim has
> pointed out, it is not a CORSA but a CPF scholarship process.  We get very
> loose and sloppy in thinking about CORSA & CPF.
> 
> During the last 2 yrs I was on the combined CORSA/CPF BoD, we were engaged
> in a sometimes lively discussion about the relationship of and between CORSA
> and CPF.  In the course of the discussion about CPF status as a IRS 501(c)3
> "not for profit educational foundation", I think it was Tony Vizyak who ask
> an insightful question during the '01 combined BoD's meeting in Chicago.
> The question was: "If the IRS requested us to prove we were a education
> foundation per 501(c)3 rules, could we do so?"  There was a long pause
> followed by sounds of people sucking air.  Since the answer
> was......well....nooooooo...., he an others set about to correct the
> situation.  So the scholarship fund was began to cover CPF's very exposed
> backside, not because "we" were concerned for needy or meritorious college
> kids.  We simply had to come up with a way to justify CPF's status under IRS
> rules in case they asked.
> 
> At the time, I wasn't a fan of the idea, primary because I had other CPF
> issues on my plate. It was somebody else's project.  In retrospect, I think
> it was correct action driven by correct thinking.  I was off the Combined
> BoD's as it was implemented.
> 
SNIP ...
> 
> CORSA and CPF are joined at the heart and the pocket book, but they are two
> separate entities in the eyes of the IRS.  Either can exist without the
> other.  Funding becomes an issue for CPF without CORSA member's
> contributions.  Even today, someone with the pockets could create a
> "Foundation for Preserving Corvair History and Artifacts" and be completely
> independent of CORSA.  My guess it is only because of the lack of deep
> pockets this hasn't happened.
> 
SNIP ...


CPF was granted 501(c)3 status based on the information it provided the 
IRS at the time (2/23/89).  I quote the purpose of CPF as contained in 
the FORM 1023 CPF provided the IRS:

Begin quote

FORM 1023, PART II
EXHIBIT A
The Corvair Preservation Foundation was established to
preserve the history and artifacts of automobiles in general
and the Corvair automobile in particular. The Corvair was a
limited production car made by General Motors from 1960
through 1969 and then removed from the market. The number
extant is decreasing every day. The Corvair has a special
place in American social history. It was very popular in
its day as a working man's car which was stylish, but
economical to drive. The Corvair was a pioneer in rear
engine design in an economy-class car. The body design
started out with the rounded shapes of the 1950's, but
evolved through the '60's to a sleek design which foreshadowed
the cars of the 1970's and 1980's. In other words, it
bridged the style generations from the cars of yesterday to
the cars of today.

Because of the unique place in automobile history which
the Corvair holds, the Foundation intends to preserve
specimens of Corvairs in working order which it will display
to the public in the Gilmore Museum in Michigan. The
Gilmore Museum specializes in displays of automobiles and
automobile-related items. It has offered the Corvair
Foundation space in which to display Corvair automobiles, as '
well as parts, drawings, and pictures. The Foundation will
be responsible for transporting the automobiles to the
Gilmore Museum, preparing all educational text to be displayed
with the autos and parts, and for providing a
pictorial history of Corvairs to accompany the display.
Foundation will also be responsible for maintenance and
preservation of all of the Corvair autos and parts on
display.

The Gilmore Museum is open to the public and requires
only a nominal donation for admittance.

The Foundation intends to acquire the autos and parts
which it will display in the Gilmore Museum by soliciting
donations from Corvair owners.

End quote

This is from what I know the way the museum operates today.

No where in the purpose of CPF is it stated their will be scholarships 
awarded.  There is no mention of CORSA at all.  In fact NO is checked to 
the question, "Is the organization the outgrowth of another 
organization, or does it have a special relationship to another 
organization by reason of interlocking directorates or other factors?"

Why does this matter?  Because when individuals donate to a 501(c)3 
organization they are allowed, subject to certain rules, to take a tax 
deduction for the value of the donation.  In turn the IRS expects the 
organization to operate in the way stated in the application granting 
their status.  Unless there have be amendments filed changing what CPF 
may do and it's interlocking status with CORSA current charitable 
donations could be questioned because of the way it now operates.  In 
fact the IRS is particularly touchy with organizations that use donated 
monies to fund scholarships to members to relatives of the same or 
related organizations.  If the CPF scholarships are funded with 
donations in which the donor did not receive a tax benefit there is no 
problem.  Stated another way there is no need for CPF to grant 
scholarships to maintain its educational status.  The IRS defines 
"educational" broadly.  Having a museum is "educating" the public that 
attends.  Few public museums have scholarship awards.  Other opinions on 
this point may vary.

I've never understood why CORSA encourages collective donations, say via 
chapter fund raisers to support CPF.  Grouping donations eliminates any 
identification of individual donors for tax purposes and any chapter 
donations have no tax benefit.  It would be more beneficial for the 
donor to make a donation directly to CPF.

John Dozsa