Are you looking for more ways to use your chamber’s 501(c)(3) foundation? It can be an effective way to support community initiatives and educational programs. However, hosting events through a foundation requires careful consideration and adherence to IRS regulations.
A recent conversation on the Chamber Pros Facebook group raised questions about events and foundations' best practices, potential pitfalls, and critical considerations for those navigating this landscape. Here's what you need to know.
As a reminder, this information is provided as general guidance. While we followed best practices in researching this article, it was not written by an attorney, accountant, or tax professional. You may want to consult one of those professionals to understand your state laws, tax implications, and/or individual situation.
If you want to run an event through your foundation, there are several important considerations and best practices to keep in mind:
The event should align closely with the foundation's mission and charitable purpose. Unlike chamber events that may focus more on business networking or promotion, foundation events should have a clear philanthropic or educational component. You’re not hosting a “Taste of” or “Bar Crawl” through your foundation.
Maintain distinct financial accounts for the chamber and the foundation to prevent the commingling of funds and simplify accounting.
Foundations typically operate as 501(c)(3) organizations, which have different rules and restrictions compared to chambers (usually 501(c)(6) entities). Key points to consider:
- The event must further the foundation's charitable purpose
- Funds raised must be used for charitable activities, not chamber operations
- Proper accounting and separation of foundation and chamber finances is crucial
-You can compensate chamber employees working on foundation events and activities
Establish written agreements between the chamber and the foundation for shared resources, staff time, or event management services. This ensures transparency and fair cost allocation.
If an event generates revenue, allocate it appropriately between the chamber and the foundation based on their respective involvement and expenses.
Provide proper acknowledgment to donors supporting foundation events, including receipts for tax-deductible contributions.
Keep detailed records of all foundation-related events, including financial transactions, attendee information, and event purposes. This documentation is crucial for maintaining transparency and compliance.
Establish a separate board of directors for the foundation, even if some members overlap with the chamber board. This board should actively oversee foundation activities and ensure adherence to its mission.
Be transparent with members and the public about the relationship between the chamber and the foundation, as well as the purpose of foundation-hosted events.
In addition to those best practices, here’s what you should know when planning an event through your chamber foundation.
In some ways, event planning through your foundation is similar to that of the chamber. However, there are a few things you'll want to consider including:
Target Audience. Identify the appropriate audience that aligns with the foundation's goals, which may differ from typical chamber event attendees.
Promotion. Leverage the chamber's network and marketing channels to promote the event, but ensure messaging emphasizes the charitable nature.
Collaboration. Consider partnering with local nonprofits or businesses for joint fundraising or community impact.
Value Proposition. Provide lasting value to attendees after the event, such as educational resources or ongoing engagement opportunities. Make sure you maintain a list of attendees and notes on their involvement. When it comes to digital marketing, personalize communications to them in the future based on their participation in foundation events. More about this later.
Fundraising Strategies. With a 501(c ) 3, you can fundraise to further your mission. To do that:
- Create unique year-end giving campaigns that highlight personal stories and impact
- Offer multiple ways for attendees to support the foundation's mission. One way may be to create a separate tier membership or Investor’s Circle that helps businesses interested in that type of community investment
- Consider implementing a "Give Local" component as part of your shop local campaigns
Volunteer Management. Utilize the foundation event as an opportunity to engage and recognize volunteers. As a nonprofit, your chamber may be an entity that is eligible for company volunteerism, when businesses give employees time off to volunteer and support their favorite causes.
Post-Event Follow-up
- Express gratitude to donors, volunteers, and attendees
- Share the impact of the event and how you will use the funds raised
- Use the event as a springboard for future foundation initiatives
-Tag people on social media and applaud their efforts for giving back
Staffing Considerations. Determine whether existing chamber staff will manage the event or if dedicated foundation personnel are needed. Ensure clear delineation of roles and responsibilities. For instance, chamber staff may be used for a one-off event. However, a more extensive leadership program may require its own staff. If that’s the case, the employee may be able to be paid through the foundation.
Hosting events through a foundation can provide valuable benefits for chambers but requires diligence and adherence to IRS regulations. You should be aware of:
With the introduction of a chamber foundation, you may now attract a new kind of business—one that’s interested in investing in the community in a much deeper way. You may have larger partners with foundations of their own who are interested in your events and programs.
Here are a few ideas to keep them interested once they show interest:
Personalize donor communications to create a stronger connection. Address donors by name in emails and letters, and tailor messages based on their interests and giving history. Use donor segmentation to send customized content that resonates with different groups of supporters. Don’t lump all foundation donors and supporters into one group, especially if you’re working on several projects like affordable housing and workforce development. While there may be overlap, some donors may not support both initiatives.
Offer donors ways to get more involved with the chamber:
- Invite them to networking mixers and chamber events
- Provide opportunities to volunteer or participate in committees
- Host donor-exclusive events or content to make them feel special
Build trust by communicating the outcomes and impact of donor contributions. Provide specific examples of how donations were used and the results achieved.
Work with local businesses and chamber members to create engaging donor experiences.
- Organize joint fundraisers with chamber member businesses
- Establish donor matching programs with chamber members
- Host community impact showcases to display achievements (or create end-of-year reports to do the same)
By carefully navigating these considerations and adhering to best practices, you can effectively utilize your chamber’s 501(c)(3) foundations to enhance your community impact and reach a group of investors who may not have been interested previously. And remember, consulting a tax professional or legal counsel is crucial when navigating the complexities of foundation-hosted events.
We value your privacy and will never sell your info