January 1998 AAOS Report

Board approves forming 501(c)6 organization

The Board of Directors, meeting in Chicago Dec. 6, 1997, voted unanimously to form a parallel-membership organization with a 501(c)(6) tax status to carry on health policy and advocacy activities for patients and the profession. The Academy, which maintains a 501(c)(3) tax status as an educational organization, will continue to provide educational and other services. The Board acted because recent Internal Revenue Service interpretations have greatly reduced the amount of lobbying a 501(c)(3) organization can do without potentially running afoul of the IRS. To maintain the Academy’s current level of advocacy activities and to allow it to respond to late-breaking legislative initiatives might jeopardize the Academy’s current 501(c)(3) tax status. "The Academy has been involved in advocacy activities for a number of years to meet the continual legislative challenges to the delivery of health care to our patients and to the viability of our practices," said Academy President Douglas W. Jackson, MD. "It is clear that legislative challenges will continue for some time to come and we must continue to be advocates for our patients."

During the September and December meetings of the Board, expert outside legal counsel and the Academy’s staff reviewed the Internal Revenue Code limitations on the amount of advocacy activities permitted by an educational organization with a 501(c)(3) tax status. They also warned that the Internal Revenue Service was taking a tougher stance on the advocacy activities of 501(c)(3) educational organizations. "We cannot risk losing our 501(c)(3) tax status," Dr. Jackson said. "We cannot jeopardize our missions in education and other areas desired by the membership."

The Board was fulfilling the mandate of Academy members who voted at the 1996 Annual Meeting to instruct the Board to form an organization with a 501(c)(6) tax status that would permit greater advocacy activity when the time is right. "The Board believes now is the right time," Dr. Jackson said. All fellows will remain members of the 501(c)(3) educational organization which will continue to provide CME courses, publications, etc. and all fellows also will be members of the 501(c)(6) organization which will focus on federal and state health policy issues. "The change will be imperceptible to members, involving mainly the distribution of expenses to the appropriate organization," Dr. Jackson said. "We will continue to carry on our primary mission of education. At the same time, we will continue to advocate for the interests of our patients."

Later this month, fellows will receive the proposed resolutions and Bylaws amendments to be presented at the Annual Meeting business meeting in March. The mailing will include the proposed Academy Bylaws amendments to ultimately shift some functions to the 501(c)(6) organization. The proposed Academy Bylaws amendments will be read at the 1998 business meeting at 11:15 a.m. March 21, 1998 in the La Louisianne Ballroom of the Morial Convention Center, New Orleans; the proposed Bylaws amendments will be voted on at the 1999 Annual Meeting business meeting in Anaheim, Calif. The initial Bylaws to form the 501(c)(6) will be reviewed and approved by the Board of Directors in January. The 501(c)(6) Bylaws will not be discussed at the Annual Meeting business meeting.

"I urge you to read the proposed amendments to the current Academy Bylaws," Dr. Jackson said. "It is of vital importance to the future of your Academy."

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