Ten years ago we incorporated as a volunteer fire department and obtained 501(c)(3) status for the “preservation and protection of life and property” in our town. Since then all our actual functions have been taken over by a governmental Fire District that pays our chief, considers our volunteer firefighters as its employees, and controls all aspects of emergency services. We have the name, a board and a small treasury but no equipment and no role in fighting fires. Are we likely to be charged with violating our purpose, lose nonprofit status or face some type of prosecution? Would dissolving the corporation be a good way to stay out of trouble?
It depends on what you do. You are not the first charity that has essentially lost its purpose. The most famous may be the March of Dimes that was originally formed to deal with polio. But when vaccines virtually wiped out the disease, they changed their purpose to fight birth defects and now “to improve the health of babies.”
There are a lot of things you can do to help preserve and protect life and property in your community. You could work on fire prevention programs, provide fire safety education, work to improve fire safety codes, promote residential sprinklers, or create a “hero” fund to help injured first responders and their families. You probably wouldn’t have to change the purpose clause in your articles of incorporation to do any of those things, but you should notify the IRS on a tax return that you have taken on new activities.
Dissolving the corporation would keep you out of trouble — and everything else. But it wouldn’t be necessary if you want to continue to support your fundamental fire safety mission in different ways.