Alfred S. Martin, ARS President
The summer season always seems to bring a sort of lull in correspondence connected with the American Rhododendron Society. This summer, the bulk of the correspondence, perhaps understandably, has dealt principally with the financial and tax affairs of the Society. Several Chapter presidents have indicated that they would like additional information on these matters. A good many questions have revolved around the matter of deductibility for Federal tax purposes of travel expenses incurred by officers, directors and specifically authorized delegates of various Chapters of the American Rhododendron Society in attending Board meetings of the Society.
The entire area can become unbelievably complex and one really hesitates to offer anything resembling a final opinion. In general, however, un-reimbursed travel expenses of an individual incurred while serving a charitable organization or attending its conventions and Board meetings as an officer, director or authorized delegate, qualify as deductible contributions for tax purposes. Generally, the Internal Revenue Service has ruled that a tax payer who gives his services gratuitously to a charitable organization may deduct as a charitable contribution the cost of un-reimbursed travel expenses, including amount spent for food and lodging, while away from home in connection with the organization's affairs. The Internal Revenue Service has also ruled specifically that no deductions for the cost of meals is allowable unless the taxpayer is away from home overnight in the course of rendering charitable services. All of these deductions are subject to the usual percentage limitations applicable to charitable contributions.
It would seem fairly clear from the body of rulings that un-reimbursed travel expenses incurred while attending Board meetings of the American Rhododendron Society would be deductible as charitable contributions. A word of caution is advisable. The Bylaws of the American Rhododendron Society do not provide for the substitution of authorized delegates for Chapter presidents as Board members. I can never remember this substitution being challenged by other members of the Board attending meetings, and authorized delegates have generally been received as voting members. Perhaps under these circumstances, one could assume that a delegate authorized in writing by a Chapter may qualify for the deductions. Under no circumstance, however, could there be more than one qualifying Chapter delegate or president at any directors' meeting. A most comprehensive review of this entire matter is contained in "Tax Techniques for Foundations and Other Exempt Organizations" edited by Stanley C. Whitehorn and published by Matthew Bendin & Company.
I am delighted to report that on July 29, 1974, the Internal Revenue Service through the National Office, ruled favorably on the application of the American Rhododendron Society for a group exemption under provisions of Section 501 (c) (3) of the Internal Revenue Code. The same ruling also reaffirms the exempt status of the organization under the same section. Twenty two chapters in all were covered by this ruling and presidents of these Chapters have been notified. Four of the Chapters already had letters of exemption under other varying sections of the Code. After the first of the year, these Chapters and the other remaining Chapters of the Society may be brought under the group exemption by submitting a relatively simple application through the National Society. The requirements for application were forwarded to all Chapters last Fall. Any additional Chapters wishing to be included for group exemption should let me know and I will make sure that they have all the information needed. The exemption letter is self-explanatory and I am sure that any of you wanting information or clarification can get this from your Chapter president.
For individual members, it means that they may deduct, for tax purposes, contributions made to either their local Chapter or to the National organization. In addition, bequests, legacies, or gifts to or for the use of exempt Chapters or the National organization are fully deductible for Federal estate gift tax purposes under Section 2055, 206, and 2522 of the Code. As far as we can determine at this point, the American Rhododendron Society is the only plant society in the country covered by a group exemption. Both Mr. James Quigley of Arthur Young and Company and the private foundations which made the processing of this application possible without expense to the Society, are to be congratulated.
I would also like to recommend that all of you read Hank Schannen's article in this Quarterly on the final results of the questionnaire survey that was done earlier in the year by Research 100. I found the print-out extremely fascinating and believe that it will probably be one of the most valuable projects ever completed in the long and short run interest of the Society. Hank Schannen gave generously of his time and private individuals funded the program so that here too, no cost was incurred by the Society.
Throughout the long summer months, we have been grappling with the financial affairs of the Society. Chapters and individual members have been most generous with their time in expressing their opinions on how the Society should be funded in these days of rapidly increasing costs. Three principle alternatives have been under discussion and they are as follows:
1. Raise the annual dues of the Society to $12.00 which has the virtue of not requiring any changes in the Bylaws.
2. Change the By-laws so that the National Society could set its dues as required and let each individual Chapter set its own dues structure according to its needs in addition to this sum.
3. Maintain the current dues but drop the Chapter's share.
These and other viable alternatives are being currently discussed by the Budget and Finance Committee and they will hopefully bring firm recommendations to the Board for their action at the Fall meeting which, incidentally, will be held in early October and I hope that I can report some concrete action in the next Quarterly.
Again, remember that we of the National group are here primarily to serve all of you and if there is anything we can do for you or any opinions that you would like to express, I shall always be delighted to hear from you.