WILMETTE, Ill. — The early part of the year signals the start of racing, pleasing the entire motorsports industry. It also brings tax-filing season, which affects racing-related businesses in numerous fashions.
This month, we will take a look into the business of nonprofits and their impact on the motorsports community.
Charity and helping those in need is at the center of the racing community’s ethos. Providing support on and off the track and giving back to the industry bring joy to many while supporting the overall motorsports initiatives.
A foundation can be set up by any individual or organization, including a family, corporation, group of friends, drivers or others. The typical goal of a foundation is to do good things for the motorsports industry and/or the foundation’s local community.
There are generally two types of foundations recognized by the Internal Revenue Service.
Private foundations are funded by individuals, families or corporations. These are endowed or funded by themselves. They allow donors more control over the charitable giving and funds may be invested and the income distributed as financial grants or operated as related programs or initiative.
Public charities typically raise money from the general public. They raise funds by hosting events that gather contributions for a predetermined cause.
Bringing positive change takes effort, along with details. Appropriate structure and management are the keys to maintaining the success of a nonprofit entity. There are specific rules governing self-dealing that prohibit transactions with related donors or related parties.
The on-going cost for filing annual tax returns to the Internal Revenue Service may be an expense. The addition of administrative, legal and risk management costs also add up over time.
Motorsports-related foundations are highly scrutinized. The media and fans closely monitor activities of these entities.
Federal and state officials oversee the myriad of regulations that govern the activities of these nonprofit organizations. Compliance and monitoring are an ongoing process.
Drivers offering a helmet or fire suit for their foundation or charity is a complicated affair. Rules vary by location and governmental license and registration costs are often prohibitive.
Tracks holding a “50-50” raffle may be considered as having a fundraising event since it is a game of chance and must comply with local lottery laws.
Nonprofit watchdogs have established guidelines and benchmarks that measure effectiveness. These operating standards cover the financial health, accountability and transparency of the charity. They focus on how much money is spent on charity work versus administrative costs and the independence of employees and directors.
Operating a charity is a full-time business. It is subject to the same business cycle as the motorsports industry and the economy in which it operates. Manufacturers and sponsors may back a driver’s charity but as sponsor lineups change, dollars might not flow as freely.
Motorsports has many entities that provide support and impact a wide range of recipients and initiatives.
The NASCAR Foundation was founded in 2006 and contributes through the Speediatrics Fund to help children in need. The annual Betty Jane France Humanitarian Award recognizes a race fan who is also a dedicated volunteer working on behalf of children’s causes.
Speedway Children’s Charities provides funding for hundreds of nonprofit organizations that meet the direct needs of children. The local chapters at Speedway Motorsports Inc. tracks work directly with communities in areas such as learning disabilities and cancer.
The Kyle Petty Charity Ride started with motorcycles traveling coast to coast. Twenty-five years strong, it has raised millions of dollars for the Victory Junction Gang Camp, which enriches the lives of children with chronic or life-threatening diseases.
There are many other team and driver specific charitable foundations and events that support causes near and dear to the hearts of those involved.
The racing community’s positive reach is felt far beyond the race track.