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Discussion Starter #1
I have been thinking about setting up a charitable sailing organization, primarily to work with young people. Is anyone familiar with how such projects work? Is it better to set up a separate organization or to attach it to an already existing non-profit or a church?
Any thoughts on liability or maritime law issues?
Any input or help will be greatly appreciated. This is all new territory for me.
 

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Kriss,

If you want a formal answer then PM me and I can go into some detail, and bring in my non-profit accountant.

Generally you would set up a 501c3 under the youth sports allowance, owned by a parent organization. You want to become an affiliate of US Sailing to take advantage of their insurance program which is incredibly cheap.

There are some liability issues, training of paid crew issues, but they are not terribly difficult to overcome or particularly expensive. US Sailing is a tremendous resource for this type of thing, and there are a lot of sailing non-profits to emulate.

All this is assuming you want a legitimate sailing non-profit. To just try and shield your own personal boat... It's possible, but gets complicated fast, and isn't cheap.
 

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kriss-
There's a lot of wasted and duplicated effort in non-profits because everyone wants to do things "their way" and there's a lot of fractious squabbling. If you attach to an existing org, or you find one that is a model and reach out to them about opening a "branch"...you still may have to deal with filings in your own state (there are state and federal filings to be done for a non-profit) and now you're in a marriage as well. Of course that means they've already done the overhead and you can just concentrate on following a model already proven to succeed.

Liability will vary with your state laws, you can usually do some web homework to find out if they cut any slack to non-profits, and the rest is in$urance. Odds are that if you reach out to someone who is not going to be competing in your area, or your market, they will be glad to discuss the issues with you.
 

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What sort of young people are you planning to work with? What sort of work are you planning to do? Our Yacht Club works with young people, teaching them to sail all summer. It also coordinates with a school in a nearby city to show inner-city kids that there are ways to get out on the water and enjoy it. Club members also got together to create a charitable organization that helps to fund kids who are participating in regattas far away, perhaps helping them to charter a boat or pay for airfare or hotels. As you can see, there are many different approaches. What's yours?
 

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Discussion Starter #6
Paul, the church I attend has a youth ministries program and I was thinking of doing something with these kids - initially some local lake sailing and eventually something more ambitious, like week long cruises. I'm primarily worried about liability issues.
 

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Kriss,

Get in touch with US Sailing. This is part of their mission, and they have a lot of experience helping people get this type of thing off the ground.

You may want to see if there is a local organization doing similar work (again US Sailing can help here) since duplicating this type of work can be expensive and harmful to both organizations since you will be hitting up the same donors for both.

Again talk to US Sailing they have by far the best and cheapest insurance on the market. The major liability issue is actually not the kids, it is the paid staff since they qualify as Jones Act Seamen so the cost of their insurance is huge. Liability for the kids isn't that big a deal.
 

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Kriss, at some point, in order to help you, the church/sponsor, insurance folks, US Sailing, and all concerned happy, you will likely need to lay out policies and procedures, probably as some sort of manual or set of documents. These should answer questions such as supervision, qualifications for volunteers and employees, emergency procedures, safety policies, swim tests, etc. You may wish to develop forms to record information for each participant, including emergency contacts, health checklist, informed consent/waivers signed by parents or guardians, skills acquired, etc. Some of this may already exist if your church participates in a youth camp or out-of-area activities and trips.

There are different kinds and levels of non-profits/not-for-profits. State approval and designation may be cheap and easy, but doesn't do anything for the feds. Getting the IRS to issue a "letter of determination" of non-profit status for a 501c3 or other nonprofit takes some paperwork, patience, and money. There are a few types of nonprofits that might be able to elect the option of "self declaring" themselves as nonprofits, but this is a tricky area where you'd want good, professional advice... maybe this is up Stumble's alley.
 

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Discussion Starter #9
Thanks guys. Lots of good info here. I think I will contact US sailing first.
 

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Rgscpat,

There is some complexity is the set up most of which is driven by the IRS not legal issues. I have an accountant I work with on these things who specializes in non-profit accounting, and is like an encyclopedia of IRS rules on the issue. But there are some things that are clear (I do mostly corporate law and corporate formation work btw).

Since this is being set up by a church group, you could go under their umbrella as an organization, but for liability reasons you really want to separate the two. Plus since the church's primary mission is not sailing it can make some other issues more complicated (accounting for donations and the like). I would toss this to the accountant for tax implications if someone wanted to do it this way, but since it raises liability issues, it would just be bad practice, unless there was some overwhelming issue that controlled.

The next option is some sort of separate corporation. Ideally we want non-profit status since then it doesn't have to pay taxes. And it would be even better if donations would be tax deductible. Luckily a 501c3 meets both these criteria and a youth sailing organization could meet at least one, likely two, and probably more of the c3 requirements.

It can get tricky, and one of the biggest issues is simply the specific words used in the formation documents, and the creation documents (they really are different things :D ). Something as simple as leaving out the word 'education' when forming an elementary school was ruled not to meet the educational requirement. But on the whole these types of formations are pretty routine. Any attorney that deals with non-profits should be able to walk you they the steps, and a good non-profit accountant (even more important than the attorney really) can guide you.

Disclaimer: none of the above is intended as legal advice, nor should be interpreted as creating an attorney-client relationship. Please retain competent counsel when dealing with any legal or tax matter as specifics matter.
 

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We have a local church that supports a Sea Scout troop. They operate a Hinckley Bermuda 40 that seems to hold up pretty well. They go on cruises and rendezvous and shorter outings as well. I wonder if the scouting regimen and officiousness turns many kids off, but in another area that might be a draw. Don't know how their insurance works, but might also be worth looking into.

If the church already has a youth group, and all you want to do is take a bunch of them out sailing a few times, their insurance might cover you too. All you'd need might be a sign-up sheet, or that and a parental permission note. A lot depends on what you want the program to do. Is it supposed to teach them how to sail? How to maintain a boat? How to get along with others in small spaces? How to have a good time with friends? How to respect Nature/God/Life? All are valid objectives for youth groups, but each would call for setting up the program in a different way.
 

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Scouting and Scouters have insurance and have developed policies such as safety afloat and safe swim defense. Working through the sailing merit badge would give Scouts a good sailing foundation.
 
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