Proposed Election
The Avondale SBA will elect a 501(c)(6) as our initial structure with the goal of adding a 501(c)(3) companion organization when grant-writing resources become available. This gives us the benefits of being able to fully advocate for our member organizations without sacrificing the ability to receive tax-free grant funding in the future.
City of Chicago Chamber Type Survey
We examined the structure of the existing Chamber of Commerce organizations throughout the city of Chicago and found: • the majority are 501(c)(6) organizations • 4 of the larger Chambers have a second 501(c)(3) companion organization • only one is structured as a 501(c)(3) directly.
501(c)(6) Type Scope
Purpose Business leagues, chambers of commerce, real estate boards, and boards of trade that are not organized for profit, with no part of net earnings inuring to the benefit of any private shareholder or individual. Donations Donations are not tax-deductible as charitable gifts; member dues may be deductible to the business as an ordinary business expense. Grant Funding Generally ineligible; funded mainly by dues, sponsorships, and events. Lobbying May lobby without limit where germane to the exempt purpose. Members must be notified if dues fund lobbying; proxy-tax rules can apply. City of Chicago Funding (BACP) Eligible.
501(c)(3) Type Scope
Purpose Organized and operated exclusively for charitable, educational, religious, or similar purposes. May not attempt to influence legislation as a substantial part of its activities; may not participate in campaign activity for or against candidates Donations Can receive tax-deductible donations and gifts. Grant Funding Eligible for grants and charitable contributions from government agencies and private foundations. Lobbying Permitted only as an insubstantial part of activities (never precisely defined by the IRS; commonly understood as roughly 5%), or under a 501(h) election. City of Chicago Funding (BACP) Eligible.