||March 2, 2015
CUAA Council Votes 21-1
to Pursue Change of Tax-Exempt Status
to a 501(c)3 Organization
Council Vote in Favor
A motion was made and passed by a 21-1 vote at the February CUAA Council meeting to pursue tax-exempt status — this time as a 501(c)3 organization instead of as a 501(c)7 as the CUAA was in the past.
That status lapsed in 2010, three years after a previous Cooper Union Administration — which had responsibility for annual filings — stopped doing so.
Why a 501(c)3?
The Council discussed two options: resumption of the previous 501(c)7, as well as a change to 501(c)3 status. The difference is as follows:
- a 501(c)7 is essentially a social club. Common examples are fraternities, sororities, hobby clubs, country clubs, etc. They derive most of their income (over 65%) from membership dues and provide services only to club members in connection with club activities.
- a 501(c)3 is formed for the additional purpose of serving educational and charitable goals. It is permitted to accept tax-deductible contributions, from any party, can run programs and sell services or products as part of its exempt purpose, and can make donations and endow scholarships from such contributions as well.
Referendum Planned for Upcoming CUAA Elections
The necessary research is currently being done to answer remaining questions about this path. An attorney has been engaged pro bono who can guide the CUAA through an application process. At the same time, a question is now being prepared to ask CUAA alumni whether they are in favor of this change in status. That question will appear as part of a larger referendum in the upcoming CUAA elections in April and May. (Please watch your e-mail.)
You can find additional information about the differences between the 501(c)3 and the 501(c)7 in a variety of places online. One useful site is: Comparison between 501(c)3 and 501(c)7