[hackerspaces] 501c3 and hackerspaces in the US

[Far McKon]

Another options is 501(c)7 status.   I've worked with several community
and a shared-equipment group that went 501(c)7 It's the classification
of an elks-club, or Rotary club, or other 'social club'.

Benefits:
- still tax exempt
- Lots less paperwork. *LOTS*

Drawbacks:
- Can't beg for giant donations (they are not tax exempt)
- Not as cool/sexy when applying for grants.

Most hackerspaces get little to no donations anyway, so it might be a
faster and easier way to get some nonprofit status.  YMMV.

hack on,
- Far McKon


On 7/5/12 4:02 PM, Buddy Smith wrote:
> Hi Everyone.
>
> I'm hear to ask questions to my fellow hackerspaces in the US. I'm
> sorry if this is off topic for those that are not in the US.
>
> Our local hackerspace is looking at becoming a 501c3, independent of
> any other entity.
>
> Is your hackerspace a 501c3? How does it affect the day to day
> operations of your space? Are there limitations on the use of donated
> versus non-donated funds? (Donations vs dues and class fees, etc)?
>
> Are any US hackerspaces 501c7? That is designed for social clubs, and
> may more closely fit the model of many hackerspaces.
>
> One of the arguments being put forth is that members must not work on
> individual projects, because that would be a benefit to the member
> versus the public, and somehow violate the 501c3 rules.
>
> (anonymous quote)
> Basically, as a 501c3 organization, if there is an action that
> benefits one or few members, it needs to be limited to a small portion
> of the overall actions of a 501c3 in order to retain tax exempt status
> plus accepting tax-deductible donations from the general public.  The
> rule is not set in stone, because individual 501c3s are so varied.
> Generally, things that are not allowed include (but not limited to)
> storage at below market rate, exclusive services to members (e.g.
> full-service garage that isn't available to public), as well as
> for-profit activities (ex. a significant portion of revenue from
> selling t-shirts that were silk-screened on site).
> (end quote)
>
> There's more to it, but this is sufficient to start the discussion. I
> look forward to reading your responses, and bringing them back to my
> hackerspace.
>
> --buddy
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