It's said all the time, but founding and growing a non-profit is not easy work. Even when things are done properly, there are many challenges. One of the key principles of The Hockey Foundation is to teach all of the children we coach that they must work through adversity. Hockey is a challenging sport that requires discipline in mind and body, and learning to conquer those challenges on the ice directly leads to learning to deal with adversity off the ice. This is fundamental to all sports, but as hockey lovers, I'm sure we're all together in believing that hockey is the premier sport for challenging players to work through adversity.
2013 began on a high note for The Hockey Foundation!
Shortly before departing on another trip to India to coach hockey throughout Northern India (Delhi, Shimla, Ladakh, Kargil) - something I'll write about in future posts - we took in a large quantity of donations & completed form 1023, the application for tax-exempt status from the IRS (US Government). Prior to this, The Hockey Foundation was (and is) incorporated as a tax-exempt organization in New York State, where we are based out of. This was a necessary and incredibly important step in the development of The Hockey Foundation, since form 1023 is required to obtain the coveted 501(c)(3) status.
The application took many months to prepare. Being a small organization with limited resources, I wrote most of the content, with help from the law firm that represents The Hockey Foundation, Proskauer Rose LLP, and some financial reporting support from a friend. Together, we edited the application over and over again, making sure every detail was covered. Altogether, after completing a long application unto itself, the Appendices of form 1023 was over 7,000 words!
I also worked to ensure that all state filings were current and accurate, and that the organization moved it's office of incorporation from Long Island to New York City (there's more support available within the city than in the suburbs, as one can probably imagine).
It took a lot of work, but ultimately, everything was completed, and just a few short days before returning to Ladakh, India in January, I mailed out the form to the IRS. Of course I didn't expect to get a response within a couple of weeks. But I did expect to get a response within 90 days, as we worked so hard and diligently on being thorough.
I routinely checked the IRS website to see if The Hockey Foundation had been added to their tax-exempt organization database, even when I was actively fulfilling the organization's mission in India. Nothing.
In the middle of this programming, I stumbled across a grant that seemed tailor-made for The Hockey Foundation. The deadline for submission was smack in the middle of Ladakh programming. There was a night where all of my assistants, volunteers and primary partners in India were sitting in a hotel lounge together, enjoying some late night snacks and drinks. I was obsessing over this grant and the support it could provide to The Hockey Foundation. It was decided that night that I would leave Ladakh for Delhi, meet with representatives at the U.S. Embassy, and dedicate my time and energy on completing this application. The assumption was that the IRS should be approving the 501(c)(3) status at any moment, and I had some volunteer coaches I entrusted with continuing the mission in my absence. This was not what I envisioned for 2013, but sometimes challenges present themselves that need to be met head-on.
The meetings with the staff at the American Center and Embassy offered some great perspective and promise, and so I tried to utilize what I learned while filling out the grant application. Additionally, the volunteer coaches seemed to be holding their own in Kargil District, and provided me with the reassurance that as The Hockey Foundation grows around the world and starts to have overlapping schedules, the mission can be fulfilled by people other than myself, which is a concern of mine, being the founder and Executive Director of this organization.
If there's anything I've learned in my travels and experiences, it's not to get too comfortable when things are going well (conversely, don't sweat the small stuff when times are tough). The 501(c)(3) status never came, a mandatory requirement for the grant, and as a result, the deadline was passed without submission.
With the grant application behind me (at least for this year), I started to press on why the 501(c)(3) status hasn't been granted. In so much of life, timing is everything, and for The Hockey Foundation, timing has been one of our greatest challenges.
The past 12 months have been particularly challenging for the IRS as well. First came a U.S. government sequester, which reduced all government spending by 10%, impacting staff resources. Shortly thereafter, a scandal at the IRS based on the determination of tax-exempt 501(c)(4) political organizations erupted. The office that determines the status of 501(c)(4) exemption is located in Cincinnati, Ohio, and is the same one that determines exemption for 501(c)(3) organizations. Scandals typically force organizations to reallocate resources in order to address the issue at hand. While I am not privy to the inner workings of the IRS, it's hard to imagine them being exempt from this organizational behavior.
Finally, and most importantly, there seems to be a few clarifications needed on our application, due to either a misfiling by the IRS or an oversight by the applicant, in the case, me. We've been waiting for 6 months to be told what clarifications are requested and required, but have yet to hear from our venerable Internal Revenue Service. Surprisingly, for an organization that knows so much about the population it collects from, they're incredibly difficult to contact, especially in the case of non-profit exemption determination (the other E.D.)
So what does this all mean?
Well, quite a bit, and very little good.
When an organization applies for 501(c)(3) status, they are legally able to operate as a federally tax-exempt non-profit, so in this regards, The Hockey Foundation is doing so. Unfortunately, no database can verify that, since the determination isn't finalized, so there are many services The Hockey Foundation is not eligible to receive or utilize (too many to list) and more importantly, it prevents The Hockey Foundation from applying for and receiving foundation grants, governmental grants, corporate charitable giving, and large-scale donations (even though it shouldn't). This has slowed the progress of growth for The Hockey Foundation, and in case you can't tell, has been frustrating to deal with.
That being said, dealing with adversity is a key principle of The Hockey Foundation, and if I and the organization I founded can't handle a few setbacks, then we shouldn't be doing what we do. We're looking for more ways to get in touch with the IRS to figure out how to resolve this issue, we're partnering with organizations that are more concerned with supporting a great cause then just getting a tax benefit, and have already facilitated a major donation of equipment that was sent ahead of me so that when I arrive in India this winter, we'll once again set organizational records for equipment donations around the region. We're still able to operate as a non-profit and collect donations, so please consider contributing to ensure we can keep fighting the good fight!
More to come...
Adam