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CRV becoming a nonprofit corporation? Good idea?

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  • warren_d_smith31
    Been researching this. Long story short: I still haven t figured out all the answers to certain important legal questions - but preliminary impression is it
    Message 1 of 4 , Jun 30, 2006
      Been researching this.
      Long story short:
      I still haven't figured out all the answers to certain important legal questions -
      but preliminary impression is it is feasible for CRV to become a nonprofit
      at least for quite a while... though it may be that eventually its "lobbying" expenses
      get high enough that nonprofit status is forbidden. Even then it is
      still ok to be a nonprofit - it is just that part of the budget will be taxed.

      Furthermore nonprofit corporation status
      seems essential if we want any decent funding from philanthropies,
      donations, members, or whatever.

      However, it looks like jumping thru all the hoops is a considerable pain,
      in terms of organizing and documenting and accounting and filing requirements,
      and also there will be a few $100 in fees to pay -
      and if we are getting less than around I dunno, $10000 per year income, then
      taxes are zilch anyhow (not sure?) so it doesn't matter.

      If hiring any employees, then get even more document filing, IRS, and legal hassle
      hoops to jump thru.

      So the question is, do we want to jump thru the hoops ASAP to be prepared
      for big daddy philanthropist who may never come,
      or do we want to wait until we get money,
      THEN jump thru the hoops and accept considerable delay THEN, and then
      take the money.

      Also, I suspect no way philanthropists are going to give us big money until/unless
      have much bigger membership & number of endorsers.
      In general. Certain specific odd philanthopists may feel differently.

      Another aspect is CRV cannot sign up for internet
      money-processing services and various things like that, unless & until it is a
      registered corporation.

      -----

      Another thing: requirements vary state-to-state.
      What is the minimum number of board members, minimum number of meetings they
      must hold per year, minimum board quorum,
      and can they meet by phone or email, in your state?
      (State secy of state, attorney general, or commerce office knows answers I guess.)
      Then we want to set it up in the right state.
      Pick a state.
    • warren_d_smith31
      Godalmighty... reading tax regulations is hellish. Anyhow, I think I ve answered the main questions. CRV, if it wants to get any serious money from
      Message 2 of 4 , Jul 2, 2006
        Godalmighty... reading tax regulations is hellish.

        Anyhow, I think I've answered the main questions.

        CRV, if it wants to get any serious money from philanthropists,
        will need to get IRS tax-exempt nonprofit status.

        There are 2 kinds of status of interest to us:

        501(c)3 with the 501(h) modification:
        Exempt from income taxes.
        Donors can "deduct" contributions as "charitable" when filing their own taxes.
        Can use up to 20% of expenditures on "direct lobbying"
        where propaganda for initiatives & referenda counts as "direct",
        and where urging (directly or indirectly) party officials to change their internal party
        rules, does not count as "lobbying".
        Advertising to urge people to urge legislators to legislate, is "indirect"
        and each dollar of indirect counts the same as 4 dollars of direct as far as fitting
        under the 20% limit is concerned. You can exceed the 20% limit - going up to 30% -
        if pay a 25% tax on the excess money. Exceed by more and you lose 501(c)3 status.

        501(c)4:
        Exempt from income taxes.
        Donors, however, can NOT deduct contributions as "charitable" when filing
        their own taxes.
        Unlimited lobbying expenses are permitted - can be 100% and that is fine.

        A standard scam is to make two organizations, one being 501(c)3+501(h) and the other
        being 501(c)4, and the latter does most of the lobbying while the former
        tries to do as much as possible of everything else.
        This minimizes total taxes.

        To do all this numerous forms have to be filed with the IRS and in the selected US
        state, you have to get a "board" and "bylaws", and you have to have "board meetings"
        you have to have the right kind of missions, blah blah blah,
        I have about 5 dense pages of notes on all the requirements.

        wds
      • Jan Kok
        I really don t know if this this is a good idea or not. On the one hand, Warren has said that some politicians and organizations won t talk or listen to us
        Message 3 of 4 , Jul 7, 2006
          I really don't know if this this is a good idea or not.

          On the one hand, Warren has said that some politicians and
          organizations won't talk or listen to us unless we have about
          $1,000,000. And if we had money, we could hire ourselves and others as
          lobbyists, web lackeys, etc.

          On the other hand, I fear that money spells Trouble with a capital T.
          In particular, if CRV tries to grow by merging with CAV or other
          organizations that have a different focus, how do the people from the
          different organizations agree on how the money is to be used? Seems
          that money emmanates a personality distortion field that could create
          power struggles and so on among those that get near it. (I'm talking
          about jointly owned/controlled money. Individually owned money is not
          so much of a problem. :-)

          And how can we avoid becoming inflexible and stuck with promoting
          ideas that turn out to be bad or just get obsoleted by something
          better? I.e. how do we avoid becoming like CVD?

          What are the alternatives to creating a board-controlled nonprofit and
          chasing after money?

          One alternative is to recruit more volunteers to "the cause". Let me
          take this moment to invite everyone on this list to get involved with
          promoting better voting methods in whatever way you can and in
          whatever way interests and motivates you. Please "join" CRV by
          clicking on the "join" menu button on the RangeVoting.org web site.
          Tell us about yourself, your talents and relevant interests. Click on
          the "Help" link at the top of the RV front page to get some ideas of
          ways you can help.

          Anyway, there are 35 people in this RV Yahoo group. 17 of us have
          "joined" and appear in the member's directory. There are now 19 people
          who have given endorsements on the "endorsements" RV web page. Thanks
          to all of you who have joined or given your endorsements. To the rest
          of you, please join and/or endorse, and please lend a hand.

          Thanks,
          - Jan
        • warren_d_smith31
          I think Jan is right about a lot of the problems we will get if we get money. (And it is not clear we can get mucho money either.) But I also do not see an
          Message 4 of 4 , Jul 7, 2006
            I think Jan is right about a lot of the problems we will get if we get money.
            (And it is not clear we can get mucho money either.)

            But I also do not see an alternative.
            yes we could in principle just get more members... but
            that is not working, at least not fast enough.
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