Community Association to Seek Tax-Exempt Status

The Chestnut Hill Community Association voted on Thursday to begin the process to obtain 501c3 tax-exempt status.  

The association has discussed seeking tax exempt status multiple times in the past, but this is the first time they've voted to actively pursue the change.

"This is probably the way to go," said Chestnut Hill Community Association Board President Brien Tilley.  "We also need to make sure the board knows what it's walking into."

The community association wants to become a tax-exempt entity to calm concerns about future budget deficits.

Right now, the money the community association raises at charity events can't be used to fund association operations.  Money raised at a charity event can only be used for a charity.

By changing to a tax exempt status, the association would have more access to more funds, and they would no longer have to borrow money from the Chestnut Hill Local, as they did this year, to balance their budget.

"We're losing the ability to raise funds," said board member Richard Snowden.  "I don't want this process to become slowed by a bunch of navel gazing.”

Besides providing the association the access to more funds, becoming tax exempt would allow donors to receive a tax deduction and the association would become eligible for community and government grants.

In order to become a tax-exempt entity, the association would have to change its bylaws to include language that identifies it as a charity, and then there’s the issue of the Chestnut Hill Local.

Because the Chestnut Hill Local is a for-profit newspaper owned by the community association, the association would have to figure out a way to separate itself from the paper while still maintaining control.

Several options were pitched including splitting the association so that the newspaper would act like a corporate subsidiary of the association.

Other option would be to turn the community association into a limited liability company or an LLC.  The community association would still manage the Chestnut Hill Local, but its operations would be separate.

The board did not make a decision either way, but simply began the process.

As its fastest, this process is estimated to take at least a year.

“Let’s get going,” Snowden said.  “I think it’ll be a great adventure.