The Last Time on the Board

FWCGM Fischer

This is going to be a short post, but it will very serious, very dangerous, and somewhat technical.  This is an issue which I have made every attempt to discuss within the Marshall Chess Club, but to no avail.

I was elected to the Marshall Board again during Frank Brady's administration.  I stayed on the board for only one meeting. 

The largest concern is the relationship between the Marshall Chess Club and the Marshall Chess Foundation.  I think the board had and has a very poor understanding of what the law is.

Marshall Chess Divan

The Marshall Chess Club is, legally speaking, a private membership club, tax exempt under 501(c)(7).  The Marshall Chess Foundation is a public service organization, tax deductible under 501(c)(3).   In my opinion, the two cannot be combined because the club is restricted to private activities and the foundation is restricted to public activities.


Too close a relationship between the two might not be appreciated by the IRS.  I think it is possible for the IRS to fine Governors directly.   The club could lose its tax exempt status, in which case, the members could sue the Governors.

50th Anniversary

One question that comes up is whether a 501(c)(7) could become a 501(c)(3).  I think it is probably illegal, and certainly not a good idea.  A 501(c)(7) is owned by its members and a 501(c)(3) is owned by the public, so that in becoming a 501(c)(3), the members would give up their equity.