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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10162
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If I was to open a bingo in Maryland, I have a 501c3

Customer Question

If I was to open a bingo hall in Maryland, I have a 501c3 license. How much money needs to be donated?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Hi,

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This is really a business planing question.

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You would need to project your operating costs (1) lease of property or debt service on mortgage, (2) entry price, based on an assumption of players x nights wouldbe an income if you charge for entry (2) prize payout cost, etc.

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You'll need to find out (if you haven't already) what your state requirements are. In some states, bingo parlors can be run as for-profit businesses, while in other states, bingo parlors can be run only by non-profit organizations or for the express benefit of a charitable organization.

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From an excellent article at chron.com:

"Develop a comprehensive business plan that outlines fundamental information related to how you will operate the bingo parlor. The business plan should include details about the financing required to start up and operate the business. Take into consideration costs related to renting or purchasing a building, utilities, insurance, equipment, staffing, marketing and advertising.

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Apply for business start-up funding, if necessary. For best results, look to financial institutions that specialize in business lending. If traditional funding is unavailable, contact your local Small Business Administration office or state Small Business Development Center for guidance on alternative business funding options."

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So again, the answer to your question has to with how you operate, and can only be answered by projecting those costs.

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From a TAX perspective, there are no limits other that (1) the normal individual limits a giver has fr tax deduction purposes and (2) being sure that the funds all go toward the operating costs of the Bingo Hall (You can set a reasonable salary for yourself, but should e in line with your responsibilities so as not t be considered what IRS calls "private inurement"or an "excess benefit transaction."

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Let me know if you have questions...

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Lane

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