[hackerspaces] Examples of IRS 1023 froms Nonprofit Makerspaces

[Robert Davidson]

I hate to state the obvious but if this determination letter Go's though and is approved. It is a game changer, it will be the determination letter that all Makerspace's hackerspaces fablabs will be judged against.

And will set the tone for all who come after and before (eligibility audit).

Good Luck in your future battle with the IRS and if you feel like you are loosing the war please reach out to the community for assistance as it very well could affect the entire United States scene.

Robert Davidson
Dallas Makerspace

> On Aug 7, 2014, at 11:07 PM, "johnrichardlogan at gmail.com" <johnrichardlogan at gmail.com> wrote:
> 
> At MakeHaven 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 
> 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
> Board Treasurer
> 
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