Forum | Starting a 501(c)(3) nonprofit

Post edited 2:11 am – December 3, 2009 by Luke Maurits

Actually, to stay on topic, we should probably make another thread where we can hammer out details of our standard contractor's…contract.  This thread is supposed to be about getting 501 status, so let's focus on issues related to that. (EDIT: Oops, apparently we weren't going that far off topic anyway according to Johnnyping's latest post).

Am I correct in assuming there will need to be a Bylaw or something to the effect of:

"The Treasurer is authorised to release CSTART funds to external persons or organisations upon award of a manufacturing contract if that award was properly given after a [meeting of some kind] with the authorisation of [various officers]"/p>

It may not actually look much like that, but there needs to be something along these lines, right?

Good to see you again, Johnnyping.  No worries about being swamped by exams, I'm sure everybody understands.  Good luck to you!

While we have you around for now, though, can you clarify Zwan's earlier question about the ability to accept donations from states other than that which we are incorporated in?  My gut tells me that surely we would be able to do this, but someone (perhaps you) mentioned earlier that we would have to incorporate in every state we want to fundraise in.  It's not clear if that applies to taking donations or only to situations where we are physically doing something in that state, like having a bake sale or whatever?  Obviously we're not going to get to the moon on bake sales, but I mean physical fund raising events that I assume fall into the same legal basket as a bake sale.

johnnyping said:

Thanks, I'm glad to be back. I wish I could do more right now, but it's that crazy time of semester.

And the answer isn't that you have to incorporate in every state, but I think for 501(c)(3) tax purposes you have to register to do (major) fundraising in that state – if we're serious about a bake sale, no one is really going to care :). But down the road, if we want to raise serious capital, we'll have to register.

Registering is an easier and much less time consuming (and less costly) process than incorporating

Thanks for clearing this up.  So we incorporate (big and expensive) in one state, and we register (small and cheap) in others.  Do we need to register just to accept online donations or is it only for major fundraising activities?

Given that so far we don't have more than one member in any US state, is the conventional wisdom just that we incorporate in whichever state has the nicest laws?  That's usually considered to be Delaware, is that right?  Or would the need for a physical address suggest that instead of that we incorporate in the state with the nicest laws out of those states in which we have members living so that they can provide a physical address?  Does anything need to be at the address or is it just so they have some sort of point of contact?  Are any of our US members happy to be that point of contact?

Okay, so we can incorporate in Delaware but list our address as a PO Box in any other state, like one where say brmj or Rocket could physically collect the mail?  Cool stuff.  How much does a basic PO Box cost in the US?  We will need to add that cost to the cost of incorporation to see how much we will need to raise.

I guess a good next step would be for someone to find the incorporation forms for Delaware so we can get a better idea of what we need.  This should be pretty easy, right, they'll be up as .pdf's on a .gov site somewhere?

I have to head out in 15 minutes so this is all I'll be able to contribute for now (I will be back later today, though, if anybody is still around).

Good work today, everybody, I feel like we've picked up some serious momentum in this direction again!  Hopefully we can beat the 501 price hike that is coming early next year.

Perhaps quailman would be able to act as our PO Box checker.  He started this whole crazy endeavour, afterall!

Brmj's question about Delaware is a good one – is Delaware considered friendly purely for tax related reasons, in which case doesn't the advantage disappear one we get 501 status?  Or are their laws friendly in other ways too?

I have a fairly weak preference for a regular PO Box too, simply beause (i) it is cheaper and (ii) it feels like there is something of a trust issue going through a third-party scanning service.  Not that I expect us to be receiving much super confidential mail because we will be such an open and transparent organisation, it just feels kind of weird to me to think of someone else opening our mail.  I am a bit of a privacy nut, though, if nobody else has any kind of problem with it, don't let me hold you back.