[hackerspaces] Examples of IRS 1023 froms Nonprofit Makerspaces

[Ian Cole]

FamiLAB (which is a DBA for Orlando Hackerspaces, Inc.) was approved with
no questions from the IRS. We used the Noisebridge docs - especially the
IRS question & answers to ensure that we covered all the required
materials. Our 1023 had a significant attachment section showing the work
we did in the community. (We'd previously been told that we should document
EVERYTHING we did in the community as it would help us through this
process, so I already had a ton of blog posts, photos, etc.

Our docs are linked here:
http://forums.familab.org/index.php/topic,638.0.html

I'd also been advised against mentioning Open Source and Open Hardware due
to IRS scrutiny on those topics. I've seen subsequent articles from Open
Source projects having trouble obtaining status. Suggest researching that
issue if you are planning on mentioning those topics as part of your
mission / activities.




On Fri, Aug 8, 2014 at 2:07 AM, johnrichardlogan at gmail.com <
johnrichardlogan at gmail.com> wrote:

> At MakeHaven <http://makehaven.org/> in New Haven we have aimed to
> achieve nonprofit recognition since our founding. The process has been long
> but it seems we are getting closer to the end. A challenge is that we seem
> to have gotten a reviewer at the IRS who is not familiar with the concept
> of Makerspaces and Hackersaces and so we are needing to make the case for
> why we qualify as an educational organization.
>
> We have had several correspondence with the reviewer and she is now saying
> we would possibly qualify for a less tax beneficial category C4
> organization. The rational being that a makerspace is similar another group
> with dangerous equipment, a gun range, as named in a previous IRS ruling.
>
>
> It does not appear you qualify for exemption under section 501(c)(3)
>> because you are not exclusively educational. Only 35% of your activities
>> are devoted to educational workshops and seminars. The bulk of your
>> activities is providing a place for members and the public to work on their
>> own projects. Basically, in exchange for membership dues, attendees can use
>> your equipment for building create and work on their projects.
>>
>
> ...
>
> Revenue Ruling 66-273 describes an organization qualified for exemption
>> from Federal income tax under IRC(c)(4) where it provides a community with
>> supervised facilities for rifle, pistol and shotgun practice and
>> instructions in the safe handling and proper care of weapons. The general
>> public is permitted full use for the organization’s facilities. Qualified
>> members of the organization conduct classes. The organization was operated
>> exclusively for the promotion of social welfare if it is primarily engaged
>> in promoting in some way the common good and general welfare of the people
>>  of the community.
>
>
>> You are similar to the organization described in that revenue ruling.
>> Like that organization you provide facilities for members of the community
>> to create, repair, construct, and tinker on self -selected projects.
>> Furthermore, you provide instruction on the use of your equipment and
>> provide assistance guidance with the projects.
>
> ...
>
>
> We see it differently. We see our organization as having broader
> educational value.
>
> We think MakeHaven and other makerspaces are collaborative workshops where
> people gain practical hands-on experience with new technologies and
> innovative processes that most would never have the opportunity to explore
> otherwise. As a means to that learning, they can design and build projects.
> MakeHaven uses experiential and cooperative learning as our primary
> methods, which are supported by more periodic and more formal structured
> activities such as workshops.
>
> We see it as well established that solving problems and project based
> learning are powerful approaches to carrying out an educational mission.
> However we need to convince our reviewer of this.
>
> I have asked around and found a very qualified local lawyer who's firm has
> granted some probono time to help us through this (hopefully hast stage) of
> the process. Her request of me was to get " the complete Form 1023,
> application for recognition of exemption" from other maker and hackerpaces
> who were successful in their applications.
>
> Following the rules of "Google it before you ask a listserve" I found
> these publicly posted examples.
>
>    - Noisebridge at: https://www.noisebridge.net/wiki/501c3app
>    <https://www.noisebridge.net/wiki/501c3app>
>    - HacDC: http://wiki.hacdc.org/index.php/Form_1023_Draft
>    - Dallas Makerspace:
>    https://dallasmakerspace.org/wiki/IRS_Form_1023_Draft
>
> It seems important that we don't get a trend started of getting
> Makerspaces denied nonprofit status. I how many others are having such
> trouble? Does anyone know of another IRS ruling which is favorable to
> makerspaces?
>
> My request of you (nonprofit / maker hackerspaces) it to share with me
> your successful nonprofit applications, and associated documents?
>
> If the group would find it useful I can compile and make these documents
> available as reference to other spaces.
>
> Best,
>
> J.R. Logan
> MakeHaven <http://makehaven.org/>
> Board Treasurer
>
>
> _______________________________________________
> Discuss mailing list
> Discuss at lists.hackerspaces.org
> http://lists.hackerspaces.org/mailman/listinfo/discuss
>
>
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