Our community band is organized in our state as a 501c non-profit corporation. I suspect that many community organizations are organized in this way as well.
If you look at the ACB FAQ, you'll see that it says
... Though there
is an exemption when there is no direct or indirect payment or other compensation to the
performers, promoters, or organizers of the event, there must also be no direct or indirect
admission charge of any kind (program ads, sponsorships, suggested donation, etc.). All
proceeds for the performance, after deduction of the reasonable costs of producing the event,
must also be used exclusively for educational, religious, or charitable purposes. Only in these
narrowly defined circumstances is an exemption granted
This needs to be parsed and interpreted carefully in order to understand exactly what it requires -- keeping in mind that it is itself a summary and interpretation of the law. However, given that, all the performances of our band appear to fall under the exemption described. Performances are not sponsored (actually, at the moment we have no sponsors that contribute in any way and for any purpose); no charges are involved in promotion.
It bothers me a little bit that this part of the FAQ has the flavor of "encouraging" an organization to purchase the performance license (I'd say "attempting to intimidate", but people would probably be upset by that). But it does provide good advice to look at your details and be sure you do conform to the requirements of the exemption. Certainly it could be improved in terms of details and some genuine examples of what counts as "indirect payment" and what does not, what counts as an "indirect admission charge" and what does not, and what counts as a "suggested donation" and what does not.
The notion of a "suggested donation" is an important one. There is a difference between "Our donations box is near the door and we appreciate any donations that you may be able to offer." and "Our donations box is near the door, and we suggest a minimum $5 donation," or more directly, sitting at a table at the entrance with the donations box which everyone is required to pass on the way in and a sign that says "A donation of $5 or more is requested." There is also (under state and federal law) a question of exactly what qualifies as an "educational" or "charitable" purpose. Sometimes the scope of such terms is broader and looser than you might suppose. However, you should consult an attorney (or at least a certified accountant) in order to be sure of such things.
In the particular organization I'm in, I have no doubt that -- at this time -- we fall under the exemption. Some organizations (this was the case in ours for a while in the past) "request" a "donation" from the venue for the performance. They don't view this as a "charge" for performance, and it often isn't regarded as "required" for the performance, but a suggestion is made and an amount mentioned. It's pretty clear to me that this would count as a "suggested donation" and violate the requirements for the exemption. However, if your organization is doing that, it should certainly be able to afford the $275 fee for the performance license from the ACB. If you're making money on the performance, then the composers/arrangers/et al. should be making money on the performance.
This discussion has made me think about our own process, and there's one performance that we have coming up in the spring that now concerns me. I don't know the details of it yet, but I'm now thinking it may require a performance license. So we'll have to look into that.