On the ballot for APA’s 2000 election, APA members will be asked to vote in favor of a proposal vitally important to APA’s future: the corporate reorganization of APA as a 501(c)(6) membership organization. Explanatory information, the documents pertaining to the change, and a chart summarizing the steps involved were published in the election section of the December 3 issue and are posted on APA’s Web site at <www.psych.org>.

Below are answers to the most common questions that members have asked about the reorganization proposal. This information was mailed to all APA members earlier this month. If you have any additional questions, please e-mail them to John Blamphin at jblamphi@psych.org or to Carol Lewis at clewis@psych.org; fax: (202) 682-6255.

A. Our members report they place high value on advocacy. But our restricted 501(c)(3) charitable tax status does not allow APA to devote the resources necessary to effectively combat threats to psychiatrists’ scope of practice and the privacy of medical records, to advocate for parity in insurance coverage for our patients, to combat abuses of managed care companies, and to advocate on other important issues. These challenges are most acute at the state level. However, IRS rules prevent APA, as a 501(c)(3) organization, from sharing significant resources with district branches and state societies, because most of them (65 out of 75) are 501(c)(6) organizations. AMA and most other medical specialty societies are 501(c)(6) organizations.

A. You will benefit from a stronger, more active district branch, working on state-level issues vital to your professional life, with funds and technical assistance provided by the national organization. Also, you will receive the same benefits you have under the present APA. The American Journal of Psychiatry and Psychiatric News will continue, and you still will get discounted registrations for the annual meeting and other benefits.

A. You will have to check with your own tax adviser, but in general, you will no longer be able to deduct national dues as a charitable expense. However, you will be able to deduct your national dues as a business expense, (if you are otherwise eligible to do so), less the percentage of the APA budget that is spent on lobbying activities. Not all advocacy work is considered lobbying. The percentage attributable to lobbying is predicted to be modest, but could grow over the years.

Example: If the "new" 501(c)(6) annual budget is $20 million and $1 million of that is spent on lobbying, then 5 percent of national dues would be nondeductible. Members paying national dues at the $500 rate could deduct $475. You will no longer be able to deduct national dues as a charitable expense.

A. One organization would be ideal. But IRS rules prohibit liquidating the assets of the present organization and transferring them to the 501(c)(6). And so, with IRS approval, the present APA, with amended and restated bylaws, will continue to exist, but as a subsidiary organization, carrying out APA’s research and education functions.

A. Here is the process:

• In December 1998, the Board of Trustees approved the creation of a 501(c)(6) organization and directed staff to move forward with the necessary planning.

• In May 1999, the new organization was incorporated under the laws of the District of Columbia, with an interim governance system and temporary name—American Psychiatric Association for Education and Research (APAER). Its governance structure will be essentially the same as the governance structure of the current APA. The same month, papers were filed with the IRS requesting permission to reorganize by creating a 501(c)(6) organization and retaining the present 501(c)(3) to continue APA’s vital education and research activities.

• Amended and restated bylaws were drafted for the present APA that would transfer members to the "new" APA and permit the current organization to continue in its supportive research and education role. It is these amended and restated bylaws that members must approve.

• Member approval of the amended and restated bylaws on the 2000 election ballot is the most critical step in the entire reorganization process. The reorganization also is contingent on IRS approval, which is expected before the end of 1999.

• At least one-third of voting members must vote on the amended and restated bylaws, and of those, two-thirds must vote in favor. A vote in favor means members approve moving forward to activate the 501(c)(6) organization. If approved, staff in 2000 will begin the necessary changes that must take place in our business, accounting, and administrative procedures.

• On January 2, 2001, the first workday of the year, the new 501(c)(6) organization will be operational. On that date, APA members "in good standing" and APA’s Board/Assembly governance system will automatically be transferred into it, and its name will become the American Psychiatric Association.

A. These are the bylaws that will govern APA until December 31, 2000. The amendments are needed whether or not we go forward with the reorganization. If the reorganization goes forward, the changes that are approved by the members will be incorporated in the bylaws for the "new" 501(c)(6) APA.

A. No. Through the continuing 501(c)(3) (to be renamed the "American Psychiatric Association for Education and Research"), we will work hard to expand our research and education work, which has been APA’s backbone for 155 years. The present APA and its subsidiary, the American Psychiatric Institute for Research and Education, currently receive over $3 million a year in health services research and training grants.

A. The 501(c)(6) American Psychiatric Association will promote the common professional interests of its members, including legislative advocacy, and will provide financial support to its district branches and state societies for similar activities. It also will conduct the annual meeting and the Institute for Psychiatric Services, and publish Psychiatric News. The American Psychiatric Association for Education and Research 501(c)(3) will continue to prepare the Diagnostic and Statistical Manual of Mental Disorders and related materials. It will publish the American Journal of Psychiatry and make it available to members of APA as a benefit of membership. It will contain as subsidiaries the American Psychiatric Press Inc., American Psychiatric Foundation, and American Psychiatric Institute for Research and Education. (That institute will be conducting an expanded program of health services research and training with grants from the NIH and other sources.) APAER may make grants to APA, but only for 501(c)(3) purposes such as supporting educational activities at the annual meeting.

A. Dues will go to the APA 501(c)(6). Research grants and other funds will go to the APAER 501(c)(3). Under the proposed reorganization plan, both organizations would be allowed to share administrative resources, so long as sharing is done on a cost basis, no profit.

A. On paper, some staff will be responsible to the APA 501(c)(6) and others to the APAER 501(c)(3), and their salaries and overhead expenses will be accounted for accordingly. But in practice, there will be a single staff as there is at present, with departments and divisions similar to what exist now.

A. We would have to start over and would lose at least two years during which we could have been providing more assistance to our district branches and in national advocacy activity on behalf of members and their patients. That is why your vote in favor of the amended and restated bylaws is important to the future of APA.