Details Regarding Nonprofit Status of Clarendon Alliance
Posted an update on twitter about this and immediately got a couple of emails and one phone call (folks, if you’re “following” the @arlingtonmarket twitter, please actually follow it via twitter’s mechanism and reply there, makes the questions easier to answer).
I’ll have to go into more detail at some point, but in a nutshell: the Clarendon Alliance is a 501(c)6, which is a “business league” nonprofit. As such, they shouldn’t be operating the Saturday market (it’s a violation of their tax exempt status, which brings with it some pretty nasty fines).
There’s some question as to whether they should even be operating outside of the Clarendon neighborhood, but that’s a bit technical.
What isn’t technical at all is that a 501(c)6 is expressly forbidden by IRS code from operating any endeavor ordinarily pursued for profit. I’ve talked with some very helpful folks at the IRS about this issue and have received some rather unequivocal answers.
The short version is that when the IRS steps in to address this issue, the Saturday market is probably going to be without an operator (and I expect this is going to get rather complex for Arlington County, as the Clarendon Alliance receives about half of their annual funding from taxpayer money).
All parties have been informed about the situation and the latest word from Mary Hynes of the Arlington County Board and Susan Anderson of the Clarendon Alliance is that everyone involved “feels” that the Alliance is in accordance with the various restrictions and requirements.
It’s a little amazing to me that this issue isn’t being taken more seriously, at least by the folks in the County (this is an election year and there are already lots of rumblings about how taxpayer funds are being spent).
My biggest fear is that this situation collapses under its own weight and the Saturday market is left without an operator, and we find out without adequate time to make adjustments (which is precisely what happened with the Sunday market).
Last note for tonight: we know some folks in the County are following us on twitter and reading this website (the access logs specify Arlington County government IP addresses). It would really be interesting if you folks with the county would respond to some of this stuff.
As always, send comments, questions, etc. care of this website, and I’ll post more news and that promised background information as soon as I can find the time.
Thanks for reading, and thanks for the supportive emails.
