We are a 501(c)(3) horseback riding facility. We have both therapeutic and able-bodied riders and we strive to maintain a 50-50 ratio of both types. Our tax exemption was based on maintaining that ratio. We are beginning to re-open from the coronavirus shutdown and fear that many therapeutic riders may have health concerns that will keep them from returning at this time. Am I correct in assuming that a temporary imbalance will not jeopardize our exemption? How long would we have to put this ratio back in sync before we may have an issue with our exemption?
I am sure you are correct that a temporary imbalance will not jeopardize your exemption. Many 501(c)(3)s, particularly performing arts groups, have had to shut down entirely during the current emergency and I can’t imagine that the IRS will question their exempt status for complying with public health orders. When you and they reopen, the public’s concern about their own health is likely to reduce attendance, even if there are no specific orders to limit participation.
Your exemption is based on an aspiration to have roughly equal participation of both able-bodied and therapeutic riders. It is not based on a requirement of absolute parity. If it were, the loss of a rider or gain of a new rider could throw you out of status and you would be forever micro-adjusting your rolls. Until we have a vaccine and/or effective treatment, it may be difficult attract riders if they feel particularly vulnerable to the virus. But so long as you are making a good faith effort to integrate and equalize your ridership, you should be fine.
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