The reality of what the Motorcycle Safety Foundation is—and isn’t

The previous entry outlined what MSF has said about itself for the past 30+ years. If you haven’t read it, please read it before this one.

In reality, MSF was incorporated in the District of Columbia in late 1972 as the “Motorcycle Industry Council Safety and Education Foundation”. According to that document, it was established as a “Not for profit corporation under Title 29, Chapter 10 of the Code of Laws of the District of Columbia” (Under the 1973 edition, Chapter 10 dealt with non-profits).

Just over a year later the incorporators—Philip Ross, James B. Potter, Jr. and Raymond W. Lucia—dropped the reference to MIC and changed the name to just “Motorcycle Safety Foundation”. The name change had the effect of obscuring the origin and link to the motorcycle manufacturers as if it was a separate, independent organization. Why?

MSF purposefully created a different version of its creation and what it was—even within documents only employees would normally see. The integral connection with MIC was hidden and then denied for over 30 years while the illusion that the two organizations (and then three trade groups) were separate was emphasized. Why?

In reality, MIC and MSF (and later SVIA) are sister organizations. Legally, a sister organization is considered an affiliate or subsidiary of another corporation. These three motorcycle non-profits use the same boilerplate for their by-laws—so much so they are virtually identical. The same member companies represented by the same employees who sit on all three boards. They share the same offices, key officers and many employees have duties for more than one of the organizations. And all three share the same tax designation.

All three manufacturer-owned non-profits are all 501 (c) 6, trade organizations. The IRS 501 (c) 6 designation MSF applied for and received establishes a not-for-profit as a trade association—the exact same tax designation shared by MIC (and SVIA).

A trade association may be defined as an organization that solely represents the interests of the member firms of an industry in order to promote that industry. As the IRS says, “To be exempt, a business league’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.” Failure to do that would mean the organization would lose its tax exemption.

MSF’s Articles of Incorporation make this perfectly clear: “The corporation is organized to operate exclusively to promote, foster, and encourage interest in the motorcycle industry by conducting motorcycle safety and education programs.” The By-Laws actually read, “The Foundation is a not-for-profit trade association organized to operate exclusively to promote, foster and encourage interest in the motorcycle industry by conducting motorcycle safety and education programs; to engage in any kind of activity, do all things, perform all acts and exercise all powers conferred upon not-for-profit corporation by the laws of the District of Columbia, all of which, however, shall be consistent with the public interest as well as the interest of safety and education in the two-wheeled motor vehicle operation, and all of which shall be necessary, incidental, or desirable in the furtherance of the purpose set forth herein.”

Iow, anything MSF does must directly make the motorcycle manufacturer members more profitable. And it’s organized exclusively to do that. While the by-laws state actions have to be consistent with the public interest and motorcycle safety and education, what does “consistent” mean? It can mean a great many things—even being unsafe and un-educational—as long as the results are uniform. The by-laws say nothing about what consistent means or how it would be measured—nor does any extant MSF internal document.

What has been consistent, though, is that the exclusive purpose to make the manufacturers profitable, its tax designation and it’s integral connection with MIC was concealed from the motorcycling public, from traffic safety experts, rider educators, government employees and elected representatives for over 30 years—and even from employees who all thought MSF was a charitable foundation. There is only one reference to MSF as a trade group in all that time. Why? (For when and why MSF admitted its tax designation back then and finally to the riding community see Riderchick here.)

Contrary to what we’ve been led to believe about MSF, then:

è It is not 501 (c) 3 charitable organization dedicated to motorcycle safety and education, and

è It is exclusively devoted to using education and safety to sell motorcycles.

è MSF is not an independent organization, and

è It is integrally connected to the Motorcycle Industry Council on multiple levels.

From the beginning and right up until today, Hartman and others misrepresented the very nature of MSF so that it appeared to both the riding and non-riding public as if it was completely opposite of what it was.

The incorporators, could have chosen to create a 501 (c) 3 charitable education or safety foundation but they did not. They still could’ve written off donations instead of writing off their dues. They still could’ve put out their own curriculum and developed a certification system. They could’ve developed their own licensing tests and sold them to the states. So why didn’t they chose to make MSF a 501 (c) 3 instead of a 501 (c) 6?

And once they had made that choice, why did the motorcycle manufacturers feel they needed to disguise MSF as a charitable education and safety foundation instead of what it really is—a trade organization?

So that’s the next question: why is the MSF a motorcycle manufacturers’ trade group?

Explore posts in the same categories: History, Motorcycle Industry, Motorcycle Safety Foundation

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