Q. When was the New York Clan Johnston/e incorporated?

A. December, 2002.

Q. Does it have a separate charter and By-Laws?

A Yes, the New York corporation has its own charter under the laws of the State of New York. It also has its own By-Laws, which are identical with those of the Pennsylvania corporation, with a few minor adjustments for New York law. The officers, council and members of the New York corporation are the same as those of the Pennsylvania corporation. However, the New York corporation has not started to operate, pending approval by the members.

Q. How did we end up with two entities?

A. Last year, at the Annual General Meeting, President Arthur Johnston asked Jeffrey Johnstone to form a New York corporation, as Clan Johnston/e in America has had no connection for many years with Pennsylvania, where it was originally formed. Since Jeffrey Johnstone is an attorney licensed in the State of New York, and he is the legal advisor to Clan Johnston/e in America, Arthur Johnston and the Council thought it would be appropriate to change the state of our incorporation to New York, a state with which we have stronger ties. Jeffrey Johnstone is not licensed to practice law in Pennsylvania.

Q. Are there any other state chapters that may want to take precedence in the future?

A. No. There are no other state charters contemplated. By law, corporations are formed under the laws of one state or another, even if they are national or international in activities. The proposed change is a one-time measure for the purpose of changing the state of incorporation of Clan Johnston/e in America, once the membership has voted on it at the Annual General Meeting in October. As soon as the proposal has been approved and implemented, the Pennsylvania corporation will merge into the New York corporation and will cease to exist.

Q. How many clan associations are listed as social, 501(c)(7) and how many are educational, 501(c)(3)?

A. A great many clan associations have gained Section 501(c)(3) status in recent years. This is by far the most desirable form of tax exemption. Clan Johnston/e in America never intended to be a "social club" under Section 501(c)(7). However, in 1977 when it applied to the IRS for recognition of exemption under Section 501(c)(3), the IRS decided that we should be classified as a "social club". Jeffrey Johnstone was the person who made the application to the IRS in 1977, and remembers that the IRS decision was a major disappointment at the time. In the 25 years that have passed since 1977, the IRS has reconsidered its position concerning clan associations, and is now granting Section 501(c)(3) status to them. It is unlikely that any clan associations which currently have "social club" status under Section 501(c)(7), if any, are happy about it

After Jeffrey Johnstone formed the New York corporation in December 2002, he applied to the IRS for recognition of exemption under Section 501(c)(3). In conformity with its current policy, the IRS granted Section 501(c)(3) status to the New York not-for-profit corporation. Legally, it was much simpler for us to obtain Section 501(c)(3) status for the New York corporation than it would have been to apply for it for the Pennsylvania corporation.

Q. Has the membership been polled whether it wants to remain a social club or become an educational and charitable organization?

A. The membership is being asked to vote at the Annual General Meeting on the proposal change the state of incorporation of Clan Johnston/e in America from Pennsylvania to New York, which will also entail assuming a new tax status under the Internal Revenue Code. This is why we sent a letter to all the other members.

Q. What budget has been proposed to carry on any increased goals of a 501(c)(3) organization?

A. The nature and activities of Clan Johnston/e in America will not change by reason of the new tax status or the change in the state of incorporation. The same activities that Clan Johnston/e in America has always conducted are now accepted by the IRS as appropriate for a Section 501(c)(3) organization. Accordingly, no change in budget is contemplated as a result of the change in tax status.