[hackerspaces] Examples of IRS 1023 froms Nonprofit Makerspaces

[Edward L Platt]

i3 Detroits application, which was approved without any questions, and our
bylaws (adapted from a NOLO 501c3 template) are here:

http://i3detroit.org/wi/index.php?title=Legal_Documents#Form_1023_.28501c3_Application.29
http://i3detroit.org/wi/index.php?title=Bylaws

My advice would be to find a good lawyer with 501(c)3 experience and let
them take it from here.

One thing to note is that we listed both education and science as our
501(c)3 exempt purposes.  It may also matter whether you applied using the
509(a)1 or 509(a)2 public support test.  509(a)2 allows you to classify
fees for services as "public support" as long as those services are related
to your exempt purpose.  More info here:

http://www.i3detroit.org/hacker-business-series-non-profit-basics/

Some points that may help:
- One of the big differences I see between a hackerspace and the example
they give is that a shooting range is dedicated to one very specific
activity.  Most hackerspaces don't "provide instructionprovide instruction
on the use of your equipment and provide assistance guidance with the
projects."  Rather they provide a space where members can instruct each
other and learn by doing.
- "Charity" is one of the IRS exempt purposes, which includes "advancement
of education or science" and "relief of the poor, the distressed, or the
underprivileged."  I would argue that hackerspaces (at least some) do both
by providing people who couldn't otherwise afford it with access to, and
experience on, technological equipment.
- If a hackerspace is not exempt for the reasons they give, it seems like
the same argument would apply to libraries and universities.

I would be very interested in having a scan of the IRS letter if you'd be
willing to share.

Also, here's the open source thing a few people have mentioned:
http://www.wired.com/2013/06/irs-open-sourc/

Happy Hacking,
-Ed


On Fri, Aug 8, 2014 at 12:33 PM, Alan Fay <emptyset at freesideatlanta.org>
wrote:

> On Fri, Aug 8, 2014 at 10:45 AM, Robert Davidson <
> robert at dallasmakerspace.org> wrote:
>
>> 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).
>>
>
> I don't think this is how the approval process works.  It's not a court,
> with a judge and prior case law or anything like that.
>
> My understanding is that you apply, your application is reviewed by one
> group to determine if you completed it correctly (all documentation
> present, applying for correct status), and if "pre-approved" - it moves on
> to the stage where you have a reviewer assigned to you.  Then that reviewer
> will actually read your documents and either make the determination or ask
> for follow-up and more information.
>
> Without seeing MakeHaven's application, it's unclear what may have shifted
> the opinion of the reviewer towards recommending a 501(c)4 vs. 501(c)3
> designation.
>
> Once you're at the stage where you have a reviewer, the process should be
> reaching completion.  I'm not a non-profit expert or lawyer or anything
> like that, but my experience with Freeside's 501(c)3 application was simply
> to call the reviewer to introduce myself and ask if they needed anything
> further from me.  That seemed to get the process moving again and got us
> our letter of determination faster.
>
> The agency responsible for 501(c)3 application recently got a lot of flak
> over the whole "denying status to politically oriented non-profits" fiasco
> from early 2013, so of course applications are getting more scrutiny.
>  These folks are used to people taking combative tones with them,
> threatening legal action, and on top of that, probably have a huge backlog
> of work to deal with.  Thinking of it in combative terms of a "battle" or a
> "war" is, at best, going to slow down the process, if not outright anger
> your reviewer.  Being patronizing is also a bad idea.  You probably do know
> more than the application reviewer on a number of subjects.  However, the
> reviewer has all the leverage and can hold your application hostage.
>
> Try being super friendly and helpful, first.  Be nice.  Sometimes
> bureaucracy is aggravating and it seems like the people on the other end of
> the phone "don't get it."  The process seems opaque and needlessly complex,
> but it's actually pretty straightforward given all the types of cases they
> have to deal with.  Exercise a little patience and take an honest
> assessment of your communication skills.  If the message isn't getting
> through, then try to find somebody in your community that is much better at
> communication to handle conversations with the reviewer.
>
> By all means, seek some legal advice - it looks like your pro bono lawyer
> sees something in the application and that's why they recommend taking a
> look at what other organizations did.  It helps to remember to write
> concisely - say only as much as you need to get your point across.
>
> Thanks,
> Alan
> Director/Treasurer, Freeside Atlanta
>
>
> _______________________________________________
> Discuss mailing list
> Discuss at lists.hackerspaces.org
> http://lists.hackerspaces.org/mailman/listinfo/discuss
>
>


-- 
Edward L. Platt
http://elplatt.com
http://civic.mit.edu/users/elplatt
http://i3detroit.com
@elplatt <http://twitter.com/elplatt>

This electronic mail message was sent from my desktop personal computer.
 Please forgive any long-winded, overly-prosaic ramblings.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.hackerspaces.org/pipermail/discuss/attachments/20140808/519cedd4/attachment-0001.html>