After nearly 123 years, the Sequim Irrigation Festival has becomes its own entity — as far as the Internal Revenue Service is concerned.

Organizers for Washington’s longest continuing festival recently said that last December it received a 501(c)(4) nonprofit status branching out from the 501(c)(6) nonprofit umbrella of the Sequim-Dungeness Valley Chamber of Commerce.

Deon Kapetan, the festival’s executive director, said the prompt is due to the festival’s continued growth.

“It’s because we’ve gotten so big,” she said.

Spread out over two weekends, the Sequim Irrigation Festival features more than a dozen events this year on May 4-13, such as the Logging Show, Grand Parade, and Family Fun Day. Its other events are scattered throughout the year too, such as its royalty pageant and this weekend’s Kick-off Dinner and Auction on Saturday, March 24, at 7 Cedars Casino, with the royalty’s float unveiling set for 4:45 p.m.

Kapetan said the festival’s volunteer board has been discussing becoming its own nonprofit for more than a year and its insurance company Insurance Services Group in Sequim has suggested a change for about three years.

Discussions predate the incident last May at Port Townsend’s Rhododendron Festival when three people fell from a Ferris wheel, she said.

“Nothing really changes (functionally with the nonprofit designation) but now we have better liability coverage,” Kapetan said. “It’s win-win for everybody.”

Shelli Robb-Kahler, executive director for the Sequim-Dungeness Valley Chamber of Commerce, agrees saying staff and volunteers at the Visitor Information Center and Chamber of Commerce will continue to sell festival products and event tickets, answer questions about the festival, and continue operations similarly to previous years.

“It makes sense as a business decision,” Robb-Kahler said. “You have to be strategic with it. The festival has grown so much.”

Kapetan said festival organizers approached chamber staff and its board of directors about their decision saying if something bad were to happen, the festival, chamber and other entities could be held liable.

“We were a liability to the chamber and we don’t want to be a liability,” she said.

The festival’s bookkeeping remains with the chamber through at least 2018, Kapetan said, and their accounts will remain separate but now the festival pays for a board of director’s insurance somewhere between $800-$1,000 a year.

By moving the festival out of the chamber’s nonprofit status, its appointee to the board (Kapetan) will no longer be able to vote on chamber matters, but the festival will remain a partner with the chamber like many other agencies, such as the City of Sequim.

Shenna Younger, president of the chamber’s board, said she and other board members are “excited to continue our partnership with the festival.”

“It’s near and dear to our hearts,” she said.

The festival’s board is run entirely by volunteers on an annual budget of about $108,000 including the two weekends, royalty scholarships and travel expenses, the royalty float, fireworks at the Logging Show, and more. Some costs are offset by in-kind donations and by proceeds from events such as the Kick-Off Dinner and ticket sales from the carnival.

Kapetan said there have been discussions about making the executive director position a paid position, but it’s not currently on the table.

“I think it would create a different environment for our sponsors,” she said. “I think people are willing to donate and sponsor when all these volunteers are working in the background. In the future, (hiring a director) may need to happen, but for now we really don’t want to change the dynamics.”

For more information on the Sequim Irrigation Festival’s 123rd year, visit www.irrigationfestival.com or facebook.com/sequimirrigationfestival.

Reach Matthew Nash at mnash@sequimgazette.com.