Many of you have asked why RWA is suddenly looking at which members should be allowed to vote. To keep it simple and straightforward, here is a comment from our treasurer followed by a few bullet points that should help clarify the issue:
Due to abuse and negligence in the tax-exempt sector, the IRS is taking a close look at tax-exempt organizations, especially those with group exemptions.
The IRS recently required RWA to complete an extensive "Group Rulings Questionnaire" that addressed numerous issues including, but not limited to, RWA's relationship to and governance of chapters. If the IRS revoked RWA's tax-exempt status, both RWA and its chapters would be required to file business tax returns and pay tax on net income.
The additional monetary cost and administrative burden to chapters, chapter leadership, and members could be significant. It is to the benefit of RWA, its chapters, and members to take steps to ensure the organization maintains its 501(c)(6) status.
— Diane Kelly, Treasurer, RWA Board of Directors
RWA is—and always has been—classified as a 501(c)(6) non-profit. This means, according to the IRS definitions, RWA is a business league.
- Notice of RWA's Exempt Status (PDF; log-in required): http://www.rwa.org/p/do/sd/sid=6727&type=0
- IRS Definition of a Business League: http://www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits/Business-Leagues
In a business league, all of the voting members need to share a common business interest.
- IRC 501(c)(6) Organizations (PDF): http://www.irs.gov/pub/irs-tege/eotopick03.pdf (Page K-10)
The attorneys and CPAs that RWA consults with on this issue are the top in this field. They have urged us to do more to ensure that voting members are pursing romance writing as a business.
The Board has a fiduciary duty to comply with laws and regulations pertaining to the organization and to follow the advice of experts. Additionally, if RWA would ever lose its 501(c)(6) designation, everyone in this organization would be impacted by higher dues and conference fees.
The issue of who may vote in the organization is separate from any PAN/PRO entrance requirements.
While associate members are not able to vote or hold office at the chapter or national level, they can still be involved in chapter activities, attend the national conference at the member rate, take workshops, receive the RWR, participate in RWA loops, etc.