Non-Profit Status

The Internal Revenue Code Section 501(c)(3) extends tax exempt benefits to organizations formed for religious, charitable, literary, scientific or educational purposes (swim teams fall under this purpose). If a corporation is tax-exempt under Section 501(c)(3), not only is it free from paying taxes on income, but people and organizations who contribute to the nonprofit corporation can take a tax deduction for their contributions. 

Swim teams organized as non-profit corporations must be governed by a board of directors. In some cases, this board consists of swim team parents, although other interested and willing volunteers could also serve on the board. Typically, the head coach serves as the chief executive with prime responsibility for managing day-to-day “dry-side” operations and total responsibility for developing and leading the swimming or “wet-side” of the program. In some small team situations, volunteer officers may manage the day-to-day business of the organization.

GETTING STARTED

You can take the Club Leadership and Business Management School online 101 course, and/or plan to attend a Club Leadership and Business Management School 201 in-person course when it is offered in your area.

Outside resources that may help in starting a nonprofit

• BoardSource. Be sure to check out the special membership offer for USA Swimming members.
• How to Start a Nonprofit Organization-Guidelines and Resources for Entrepreneurs
• Table of Reminders for Registering Your New Nonprofit

Advantages

• Tax-exempt status. If recognized as 501(c) (3), contributions to organization are tax deductible.
• Limited legal and financial liability for directors and staff.
• Organization structure and purpose tend to promote altruistic aura that can facilitate financial and volunteer support.

Disadvantages

• Turnover of leadership often leads to lack of continuity in organizational vision and purpose.
• Parent directors often do not understand the role of a Board and tend to micromanage the staff and organization.
• Young and/or inexperienced head coaches sometimes struggle with successfully fulfilling the CEO responsibilities.
• Tend to be somewhat reliant on fundraising revenue to meet resource needs.
• Subject to more government regulation than proprietorship's or partnership's.
• Property and assets transferred to corporation must stay there; if the corporation ends, assets must go to another nonprofit.