R DeWald on Sun, 13 Jul 2003 15:08:04 -0400

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Re: [PLUG] Non-Profit -- was The Next Step? -- was Community Service Project (Devil's advocate)

Back in the day, Sunday 13 July 2003 11:58, you e-mailed this:
> You forget the most important -- Non Profits must file all kinds of
> City, State and Federal tax returns, and those must be signed by the
> officers...

It's not quite so dire, I have administered a non-profit.  The problems are 
scalable, i.e., small ones have small problems.  There are software packages 
that do all the tax stuff automagically.

> ... translation -- PERSONAL LIABILITY for the actions of others over
> whom you may or may not have control.

When you ask for the right to receive and spend tax-exempt funds,then yes, 
you have some accountability to the government and to those who send in the 

> Want to diffuse the liability, then incorporate... oops more paperwork
> and tax returns.

Not more tax returns, different ones.  The incorporation paperwork can and 
should be handled by an attorney.  There are law firms that specialize in 
this at a lower price point.  It's not a major hassle or expense.

> And more to the point -- being a non-profit does NOT mean that you
> don't have expenses to stay that way. That is why "good" non-profits
> are those who spend no more than 40% of their income on "overhead."

That's correct, but also a bit oversimplified.  Comparing NP's on the basis 
of % overhead is a bit like apples to oranges.  Some NP's have legitimate 
activities/responsibilities that demand a lot of overhead, some are just 
poorly administered, some are outright dishonest.  You can't tell the 
difference by just looking at the %overhead.  Some NP's have 100% overhead 
because they are providing a service rather than redistributing contributions.

Having said all that, I think the issues here revolve more around what you 
want to do and how you want to fund it.  If it's a bunch of hobbyists getting 
together to make some discarded PC's useful to some kids that can use them, 
then why put anything (other than where to meet for beer afterward) on paper?

If you plan to put a full support community in place then you are going to 
need money, even if your workforce is volunteer.  There's lots of money 
looking for tax relief, I don't think you'd have much trouble getting it, but 
being set up to get it does require that you have your ducks in a row and 
someone will have to be paid to line them up and keep them that way.

I don't think one option excludes the other.  Why not do a pilot project with 
whatever hardware you have now and see what happens?  Solving problems you 
actually have is going to accomplish more for the kids than speculating about 
solutions to problems you imagine you might have.  The discussion is 
interesting and useful, but's let's face it, it's just making all of us feel 
smart.  Until some rubber hits the road, it's still just good intentions, and 
we all know where that road goes.

My suspicion is that if you do the pilot project then the rest of the 
problems and the work required to address them will become known, if there 
are any.  

I think everyone should expect (and be emotionally prepared to accept ) that 
a certain number of these PC's will be sold by the parents almost immediately 
upon receipt.  That's just reality.  Another portion of them will become 
paperweights and dust pedestals.  It takes a really special combination of 
resourcefulness and self-respect to take advantage of an opportunity like 
this and there are a fair number of families in your target demographic that 
are going to lack said resourcefulness and self-respect.  Unfortunately, you 
can't give them that.

We all know the value of our OSS expertise and we'd like to make good use of 
it.  I think that is fantastic.  This is a great idea, but before too much 
energy goes into deciding what flavor of 501(C) is best, I think it might be 
really instructive to just do something.
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