Know Your Association; Know Your Decal
Know Your Association
The National Association of Livestock Trailer Manufacturers (NALTM) was founded in 1987 when a group of horse and livestock trailer manufacturers met in Chickasha, Oklahoma. The Association was incorporated in Texas in 1990. By 1992, this young Association realized that all manufacturers of light- and medium-duty trailers faced the same business, regulatory, and legislative issues. So, the Association dropped the “Livestock” from its name and became the National Association of Trailer Manufacturers (NATM). NATM is a trade association, a membership organization governed by its members for the benefit of its members and the industry in general. Trade associations that meet the requirements of Internal Revenue Code section 501(c)(6) are entitled to be exempt from federal income tax as “business leagues,” thus qualifying as not-for-profit organizations. NATM filed for and was granted 501(c)(6) tax-exempt status by the Internal Revenue Service (IRS) on April 1, 1991.
NATM is a not-for-profit 501(c)(6) trade association. It is governed by a set of bylaws investing governing power in an elected board of directors. The Board owes a fiduciary duty to the Association’s members. The Board hires the Executive Director to manage the day-to-day affairs of the Association and instructs the Executive Director through written Board-adopted policies that prescribe the organizational goals to be achieved. The Board also develops policies instructing the Executive Director to achieve Board specified results, for specified recipients, at a specified cost.
The Board also appoints a Finance Committee. Each year, the Finance Committee prepares a balanced budget for the Association to ensure the Association has adequate resources to fund programs and remain financially sound. If revenues exceed expenses, the excess revenue is allocated to “reserves” with the goal of accumulating sufficient funds to cover a number of months’ operating expenses – in NATM’s case, six to 12 months of operating expenses – to ensure the Association remains financially sound through economic downturns. Reserves are also used to fund special projects when technical, regulatory, or legislative issues impacting the industry that must be addressed by the Association. All excess revenue not placed in reserves is rolled back into Association-run programs to benefit members and to keep dues and convention registrations at an affordable rate.
Nonprofit organizations must maintain complete transparency, and their 990’s filed annually with the IRS. These forms may be viewed online and are on file for public inspection at the Association headquarters office. If you want to check whether an organization you belong to is a nonprofit, you can check at www.guidestar.org. This is also a good resource to check on 501(c)(3) (charitable) organizations to verify if donations to the organization are tax-deductible. Dues to trade associations – a 501(c)(6) – are deductible as a business expense, less any amount dedicated to lobbying. This non-deductible amount must be disclosed on membership renewal forms.
IRS Exemption requirements:
The IRS defines a “business league” as an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit.
To be exempt as a business league, an organization's activities must be devoted to improving business conditions of one or more lines of business (as distinguished from performing particular services for individual persons). It must be shown that the conditions of a particular trade or the interests of the community will be advanced. Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose.
No part of a business league's net earnings may inure to the benefit of any private shareholder or individual and it may not be organized for profit to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only enough income to be self-sustaining).
To be exempt, a section 501(c)(6) organization must receive meaningful membership support.
Trade associations and professional associations are business leagues.
Know Your Decal
In 1990, the first “Mark of Excellence” gold decals from NATM were sold to members for one dollar per decal to be placed on members’ trailers. The purpose of the decal was to promote pride in membership and to raise revenue for the Association.
With the establishment of the Compliance Verification Program in 2002, NATM created a new red, white and blue circular decal to draw attention to members who had voluntarily participated in and passed a compliance consultation. The sales of these serialized compliance decals were also used to underwrite the cost of the program.
As participation in the Compliance Verification Program grew, the NATM Board of Directors decided to do away with the original gold decal, focusing Association efforts on marketing the value in the red, white, and blue decal.
While compliance with federal regulations is the law, the commitment to having a third party verify compliance is no small undertaking. NATM members must regularly undergo compliance consultations and when non-compliances are found, members are given 60 days to make and provide proof of necessary corrections. When companies fail consultations and do not make the necessary corrections as required by program policies or refuse a consultation, their membership is terminated.
The choice to join NATM and expend resources to verify compliance deserves recognition and communicating that level of commitment to dealers and end-users can be one tool for increasing the marketability of trailers. An easy way to communicate this dedication is through the purchase and application of the NATM Decal. Purchase of the NATM Decal is only available to members who have completed and passed their Compliance Verification Program consultation.
The NATM Decal is an outward symbol of safety and its recognition continues to grow. With the launch of the Dealer Affiliate Program, trailer safety education continues to expand and with it so does knowledge of the importance of the red, white, and blue NATM Decal. That small circle allows dealers and consumers the peace of mind of not needing to be experts on regulatory compliance but instead allows them to simply focus on selecting the right trailer for their needs and hitting the road.
The NATM Decal also holds value beyond its symbolism for dealers and end-users. NATM regularly works with law enforcement on stolen trailer issues. As thieves tend to scratch off labeling and VIN numbers that would identify a trailer, they often leave the NATM Decal attached. NATM has been able to connect law enforcement agencies all across North America with the manufacturer of the trailer to resolve these crimes because of the serialized decal. Further, the decal allows small and large businesses alike to access the resources made available through NATM via the scannable QR code found on each NATM Decal.
To purchase decals or marketing materials about the importance of the NATM Decal, contact NATM at (785) 272-4433 or at NATMHQ@natm.com.