Katrina Fundraiser for Portland-Based Mercy Corps, Oregon-Wine-Country.com, 'Flooded' with Tax Grief

Pictures of the devastation wrought by Hurricane Katrina galvanized many people to action. Work-at-home and small business coach, Sarah Hurty, came up with a unique idea to raise lots of money for Katrina victims in a way that would overcome donor fatigue – a "buy one get one free" local dining card to raise funds for Katrina victims served by Portland-based Mercy Corps.

"We’re right here in the heart of Oregon wine country with some of the best restaurants in the state – but there are few dining deals offered, and even the locals take a long time to discover just what excellent restaurants we have," said Hurty. "Plus, we’re an hour away from Portland and Salem, where most of the restaurants on the usual "free entrée" dining cards are concentrated. It just seemed like it would be a win for everyone involved if we created a local dining card to raise money for Katrina victims."

It took a few months to set up, but local restaurants were strongly supportive, so much so that two separate cards were created. The Oregon Wine Country Elegant Dining Card features fine dining restaurants like The Joel Palmer House in Dayton and Nick’s Italian Café in McMinnville. Niche establishments like Calamity Jane’s in Dundee and Third Street Pizza in McMinnville are featured on The Oregon Wine Country Fun Dining Card.

The trouble came right before the dining cards were set to launch over Thanksgiving weekend, when people might want to give the card as a unique, money-saving Christmas gift. Hurty is the marketing coach for Eva Rosenberg, aka TaxMama, who informed her that the IRS would likely consider the funds raised through the dining card to be her personal business, even though she would keep no money for herself.

"I was stunned," said Hurty. "I would likely be on the hook for self-employment tax on the money raised, and income tax on the amount given to Mercy Corps that was in excess of 50% of our income for the year. Since the target goal was $200,000, that was a lot of money in taxes I would get assessed."

Discussions with her CPA, a tax attorney, and three hours with the IRS itself confirmed TaxMama’s concern. Hurty had to refrain from selling the card while she figured out what to do. She finally decided to start a non-profit organization, and has begun the process of pursuing 501c(3) status with the IRS. Says Hurty, "There are no guarantees, of course, but several discussions with the non-profit section of the IRS made it seem very likely our application will be successful. They were really quite helpful, looking up any potential pitfalls to the application and helping me to craft what I needed to present for approval."

So now, months later, the Oregon Wine Country Dining Cards can finally be purchased to raise money for Katrina relief through Mercy Corps. "Lots of help is still needed, and there is plenty of time left on the cards for people to use them. They are such a great deal that I’ve already purchased a second fun dining card myself because it saves so us so much money eating out."

Hurty is hoping to reissue new cards in the November, with even more restaurants joining in, but this time to raise money for local charities. "We have strong community support," said Hurty. "Our excellent hospital, Willamette Valley Medical Center, is sponsoring the card. The local restaurant owners are really caring people, and are joined by our local wine cellars as some of our strongest charity supporters."

Over the next few months Hurty will be seeking new partners to raise money for local charities through the dining cards. "Wine cellars can feature the card in their tasting rooms and on their websites to raise money for a local charity they select. Wine tour guides could make the card an exciting addition to their packages. Local businesses might link to the dining card website for their favorite charity. And local charities can let their supporters know about the card to raise money for their programs. This could be a fun community project to fund our local charities," said Hurty.

Those interested in learning more about fundraising tax liabilities, the Mercy Corps, and/or Oregon Wine Country Dining cards are invited to visit their respective websites: www.taxmama.com, www.mercycorps.org, and www.Oregon-Wine-Country.com

Media Contact
Sarah Hurty
Oregon-Wine-Country.com
503 488-5934