Background:  NorCal Collie Rescue was incorporated on August 29, 2005, filing Articles of Incorporation with the California Secretary of State, under the California Corporation Code's designation of a public-benefit, non-profit (not-for-profit) corporation.  NCR files annual statements with the California State Attorney General and biennial statements with the Secretary of State, as required by law.  NorCal Collie Rescue applied for and received tax-exempt status from the California State Franchise Tax Board and the U.S. Internal Revenue Service, under the 501(c)(3) section of IRS code.  Read more about our history here.

The exempt purpose of NorCal Collie Rescue, as stated in its Articles of Incorporation, is:  to prevent cruelty to animals by rescuing and rehoming purebred collies and to assist the public by promoting means to prevent purebred collies and other dogs from needing to be rescued and rehomed. 

As allowed under the California Corporation Code, as a non-profit corporation, NCR may charge fees for services supplied under its exempt purpose.  NCR may also solicit donations, which are distinct from fees, from the public to further its exempt purpose.  The difference between a fee and a donation is as follows: 

• A donation is freely given by the donor and may be either materials or funds.  The amount of the donation must be set by the donor and cannot be specified by NorCal Collie Rescue.  NCR must issue receipts to donors for all donations of $75 and greater.  NCR's policy is to issue a receipt for any and all donations, regardless of amounts, suitable for declaring donations to NCR as tax deductions on federal and state tax returns.

• A fee is charged for specific services to cover the costs of those services, offered by a non-profit organization in pursuance of its exempt purpose.  The amount of the fee is set by the non-profit and disclosed in its financial statement. Beneficiaries of the services of a non-profit corporation in California must pay that fee in order to receive those services. 

FAQ:  What fees are charged by NCR?  Answer: At the moment, the only fee charged by NorCal Collie Rescue is an adoption fee, which covers the cost of rescuing and rehoming purebred collies. 

• The adoption fee is set according to a fee schedule that is based upon:

  • pooling adoption fees of all dogs rehomed to cover the costs of rehoming all dogs in any given year; and

  • supply and demand for rescued purebred collies, taking into account the age of the collie, its health, its projection of future longevity and the likely costs and benefits to the adopter. 

• The NCR fee schedule and other adoption information may be found here.

FAQ:  How are the adoption fees actually set?  Answer:  NorCal Collie Rescue sets its fees based upon its actual costs, and projections of its expected costs, in any given year. 

• Fees are set at the annual meeting of the board of directors, based upon the previous year's financial statement. 

• NCR takes into account the current market value of its services. 

• Since NCR's incorporation, adoption fees have covered only 70% of the costs of preparing a collie for adoption, with donations making up the difference. 

•  In addition, in 2006 NCR paid only 56% the costs of rehoming collies, with volunteers making up the difference with an unreimbursed subsidy of $142/dog so that NCR could accrue assets during its first year.  More information is available in NCR's 2005-2006 financial statement.

FAQ:  Are non-profit corporations allowed to make a profit in pursuing the tax-exempt purpose of that corporation?  Answer:  Yes.

• California corporation code not only allows a non-profit corporation to run its business profitably, all non-profit corporations in the state of California are expected to make a profit.

• So, why are they called "non-profit?"  More properly, such corporations should be called "not-for-profit."

  • The profits of a FOR-profit corporation are given to the stockholders of the corporation and the officers of the corporation for their personal use.

  • The profits of a NOT-for-profit corporation must be invested back into the corporation for pursuing its exempt purpose. 

• Profits accrued by not-for-profit corporations are typically used for either or both of two purposes:

  • Profits may be used for building infrastructure for the corporation's exempt purpose.  NCR started in 2005 from scratch, with no financial assets, so the period of 2005-2006 focussed on growth of NCR's assets and infrastructure.

  • Profits may be used for accumulating a buffer, a margin, to assist in catastrophic situations such as (for NCR) extremely expensive veterinary bills or large-scale rescues, such as from a puppy mill, animal hoarder, and assistance with other animal cruelty cases pursued by law enforcement; and to anticipate variations in income without affecting NCR's ability to fulfill its exempt purpose.

FAQ:  How much profit does NorCal Collie Rescue make?  Answer:  NCR has not yet operated profitably when the unreimbursed volunteer subsidy is taken into account. 

• Currently, NCR loses about $10 per dog adoption on average. 

• In 2005-2006, NCR volunteers absorbed much of the costs of operation, allowing NCR to build its infrastructure during its first year and to accumulate a modest buffer for unexpected, large expenses. 

• So far, NCR has been able to help each and every collie that comes to attention of its volunteers--no collie has been turned away because of lack of funds. 

• NCR's ability to help all needy collies in northern California has been possible primarily because of the generosity of donors and volunteers:

• In 2005-2006, 61% of NCR's annual income was from donations and only 39% from adoption fees.

• In 2005-2006, volunteers did not seek reimbursement for the real costs of rescuing and rehoming collies, estimated to be at least $5000 per year.